METROPOLITAN Bank & Trust Co. (Metrobank) is looking to raise P5 billion via peso-denominated bonds to support its lending business and expand its funding sources.

In a stock exchange filing on Tuesday, the Ty-led lender said it will issue P5 billion worth bonds, with the option to upsize.

The bank said the issue will have a tenor of at least three-and-a-half years “to be priced using the applicable interpolated PHP BVAL (Bloomberg Valuation Service) Reference Rate benchmark.”

Metrobank said the final issue size, terms and the timetable will be based on market conditions.

The bonds to be issued are part of its P100-billion bond and commercial program.

“The proceeds of the issue are intended to be used to support the bank’s lending activities and diversify funding sources,” Metrobank said in an email yesterday.

“This also gives our clients an opportunity to invest in higher-yielding high quality assets. Bonds have been granted by the BSP (Bangko Sentral ng Pilipinas) a lower reserve requirement compared to deposits,” the bank said.

Metrobank has mandated ING Bank N.V.’s Manila Branch and Standard Chartered Bank as joint lead arrangers for this planned issuance.

The lender said it has raised some P56.75 billion via peso-dominated bonds since November 2018.

Metrobank raised P11.25 billion in fresh funds via two-year bonds in July, more than twice than the programmed P5-billion offering amid strong demand from investors. The notes carry a coupon rate of 5.5%. This was also part of its P100-billion bond program.

In April, Metrobank raised P17.5 billion via three-year bonds carrying a coupon rate of 6.3%. In November last year, the bank likewise raised P10 billion through two-year fixed-rate bonds with an interest rate of 7.15%. This issuance was reopened in December for another P18 billion offering.

Metrobank’s net income in the second quarter rose 15.5% to P6.48 billion from a year earlier, buoyed by sustained loan and margin growth as well as fee-based profit.

This brought the bank’s second-quarter earnings to P13 billion, 18% higher than a year earlier.

Shares in Metrobank declined 20 centavos or 0.29% to close at P69.95 apiece on Tuesday. — Beatrice M. Laforga