METROPOLITAN Bank & Trust Co. (Metrobank) is planning to raise up to P20 billion by selling long-term negotiable certificates of deposit (LTNCD) to diversify its funding sources.
In a disclosure to the stock exchange on Thursday, the Ty-led lender said it is set to issue peso-denominated LTNCDs worth up to P25 billion as approved by its board of directors.
The capital raising activity will be done in one or more tranches of at least P2 billion a tranche, with tenors of 5.5 years up to 10 years.
The offering is subject to regulatory approval and market conditions.
The issued long-term papers will be listed on the Philippine Dealing & Exchange Corp.
LTNCDs are similar to regular time deposits which offer higher interest rates, but the difference is that these cannot be pre-terminated. Being “negotiable” means that these can be traded at the secondary market prior to maturity date.
“The proposed program is part of our objective of diversifying funding sources and raising long-term deposits,” the bank said.
In 2016, Metrobank announced it will be raising P20 billion through LTNCDs. The second tranche of the offering was conducted in July last year worth P5 billion.
Metrobank recently completed a P60-billion stock rights offer, selling 799.8 million common shares at P75 apiece.
Proceeds from the rights offering will be used for loan expansion across the various segments of the economy, as well as the acquisition of the remaining stake of ANZ Funds Pty. Ltd. in credit card provider Metrobank Card Corp., thereby fully owning the credit card issuer.
Last year, Metrobank posted a P18.2-billion core net income in 2017, up by 10% from the same period in 2016, on the back of robust growth in its loans and deposits.
Metrobank shares closed at P81.60 apiece on Thursday, down P2.15 or 2.57% from the previous day. — Karl Angelo N. Vidal