Metrobank offers as much as P6.5 billion in new notes
FILE PHOTO
MANILA, Philippines — Local banking giant Metropolitan Bank & Trust Co. has returned to the local capital market to raise as much as P6.5 billion from the sale of debt notes qualifying as Tier 2 or supplementary capital under the Basel 3 capital adequacy framework.
This is the second issuance by the bank using a leeway given by the Bangko Sentral ng Pilipinas to raise as much as $500 million from a Tier 2 offering. As Metrobank previously raised P16 billion from the sale of such instruments last March, it has authority to issue a new series worth as much as P6.5 billion to complete its authorized Tier 2 issuance.
Metrobank started on Tuesday the offering of this new series of Tier 2 notes with a coupon rate of 5.25 percent per annum which will have a tenor of 11 years (due 2025) with an option for the bank to redeem the notes after six years (2020). Interest payments are due quarterly.
The series 2 notes will be offered until July 28 but the offer period can be adjusted by the bank subject to market and other conditions, the disclosure said.
Minimum investment is P500,000 while additional investments are in increments of P100,000.
Article continues after this advertisementAs a Basel 3-compliant instrument, the notes will have a loss-absorption feature.
Article continues after this advertisementUniversal and commercial banks were required by the BSP to adopt starting Jan. 1, 2014 the capital adequacy standards of Basel 3—a complex package of reforms designed to improve the ability of banks to absorb losses.
Metrobank has mandated ING Bank N.V. and Standard Chartered Bank as joint lead arrangers and selling agents for this transaction while Metrobank itself is a limited selling agent. Multinational Investment Bancorporation will serve as market maker and selling agent.
As of end-March, Metrobank reported consolidated resources of P1.4 trillion alongside a Basel 3 capital adequacy ratio of 16 percent with Tier 1 ratio at 12.8 percent of risk assets.
The Tier 2 notes issued by Metrobank last March were priced at a coupon rate of 5.375 percent per annum, or 151 basis points over the five-year PDST-F government benchmark. They will mature in June 2024, but Metrobank has the option to redeem or call on the notes early in June 2019.
RELATED STORIES
Metrobank offers at least P5B in debt notes
