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MANILA, Philippines—Metropolitan Bank and Trust Co., the country’s biggest bank in assets, will soon offer new debt paper that may qualify as tier 2, or supplementary capital, worth up to P10 billion or its equivalent in US dollars.

There is a growing trend among banks to beef up capital adequacy and allow the institutions to lend more. The banks are operating in a difficult environment marked by volatile treasury earnings.

Metrobank in October issued tier 2 notes and raised an estimated P8.5 billion.

Its investment banking arm, First Metro Investment Corp., was mandated as the financial advisor. ING Bank, a co-arranger during Metrobank’s previous issuance, again took part in the deal, banking sources said Thursday.

Metrobank disclosed to the Philippine Stock Exchange that its board of directors had approved the issuance of “lower tier 2” debt notes in one or more tranches.

Lower tier 2 capital is supplementary capital packaged as an interest-bearing note with a limited tenor of at least five years. The ranking of these notes is subordinated to the claims of bank depositors and senior creditors.

Among other big banks that recently issued tier 2 notes, to expand lending or refinance debts, were Banco de Oro Unibank and Philippine National Bank.

Metrobank meanwhile declared a 3-percent cash dividend totaling P1.08 billion based on its outstanding capital stock. At a par value of P20, the cash dividend will amount to P0.60 per share. Doris C. Dumlao; with editing by INQUIRER.net

• Pursuing Ro-Ro scheme, DBP acquires maritime firm
• Asian stocks slide as global mood sours
• Philippines can withstand more rate hikes -- central bank
• Billion-dollar microchip plant opens in Singapore
• Metrobank to sell $226M Tier 2 notes
• Wild oil market bites big Wall St. banks in Q2
• SM Prime notes issue raised P3B
• AIG Philam Savings acquires Primus
• Treasury rejects bids for 3-yr bonds

• RP raises $1.5B from int’l bond offering
• Shares slide 1.66% lower
• Economic crisis fears return
• Forex reserves as record $37.1B
• RP less vulnerable to crisis, says Fitch
• NFA rice procurement highest since 1979
• Treasurer sees drop in interest rates
• HK fund buys 13% of Alliance Tuna
• Philex reports P800-M output