METROPOLITAN Bank & Trust Co. (Metrobank) has raised P10 billion in fresh funds via fixed-rate bonds — the first ever bond issuance by a local lender since the regulator liberalized rules on banks’ fundraising activities.
In a disclosure on Friday, Metrobank said the bond issuance, which is part of its P100-billion bond and commercial paper program announced last month, carry an interest rate of 7.15% and a two-year tenor. The lender listed the papers on the Philippine Dealing & Exchange Corp. last Friday.
The bank’s issuance marks the first ever by a local lender under Bangko Sentral ng Pilipinas’ Circulars 975 and 1010 which allow banks to tap the capital market as a funding source without having to secure approval from the regulator. It is also the first bank bond priced under the new benchmark, the PHP Bloomberg Valuation Service Reference Rates, which replaced the Philippine Dealing System Treasury Reference Rates.
Metrobank said the offering was almost 10 times oversubscribed on the back of robust demand during the book building process. The lender upsized the issue to P10 billion from its initial target issue size of P2 billion after orders reached as much as P19.635 billion.
Standard Chartered Bank acted as the transaction’s sole arranger, selling agent and market maker. Metrobank and First Metro Investment Corp. were also selling agents, while UnionBank of the Philippines was another market maker.
“We are proud to once again be a trailblazer in the local bond market. Our hope is that this issuance paves the way for a robust market for bank-issued bonds in the near future. We are grateful to the BSP and the SEC (Securities and Exchange Commission) for allowing this opportunity to diversify our sources of liquidity to fund our growth prospects…,” Metrobank President Fabian S. Dee was quoted as saying in the statement.
“This is a major development in deepening the local capital markets space as we expect other banks to follow suit. This maiden issuance allows Metrobank to establish its own credit curve and will serve as a benchmark not only for its future issuances but also for other bank issuers,” Standard Chartered Bank Philippines CEO Lynette V. Ortiz said.
Last month, Metrobank likewise raised some P8.68 billion from the first tranche of its P25-billion long-term negotiable certificates of deposit program. The notes will mature in 5.5 years to be paid quarterly and carry a 5.375% rate.
Metrobank posted a P5.3-billion income in the second quarter, up 31% from the P3.9 billion tallied the previous year on the back of its robust core business.
Shares in Metrobank went down 50 centavos or 0.76% to close at P65.05 each on Friday.