Metrobank completes P6.5B IOU issuance

MANILA, Philippines–Local banking giant Metropolitan Bank & Trust Co. has completed the issuance of debt notes qualifying as tier 2, or supplementary, capital worth P6.5 billion.

Metrobank decided to cut short the public offering period due to strong demand from investors.

The offer period for the tier 2 issuance was supposed to run until July 28, Metrobank said in its disclosure to the Philippine Stock Exchange on Wednesday.

The bank said “strong demand from institutional and retail investors already exceeded the allowable issue size.”

Metrobank said the order book was more than two times oversubscribed at the end of Tuesday—the first day of the offering.

The bank then decided to close the offer period.

The tier 2 notes carried a coupon rate of 5.25 percent per annum. They have a tenor of 11 years with an option for the bank to redeem the notes after six years.

The tier 2 issuance, the second in a series for this year, completed the bank’s P22.5-billion fund-raising program. Earlier, Metrobank received the Bangko Sentral ng Pilipinas’ approval to issue up to $500 million worth of tier 2 notes.

Last March, Metrobank raised P16 billion from the first series of tier 2 notes which carried a loss-absorption feature and would be eligible as supplementary capital under the Basel 3 capital adequacy framework.

Starting Jan. 1, the BSP required universal and commercial banks to adopt the capital adequacy standards of Basel 3—a complex package of reforms designed to improve banks’ ability to absorb losses.

ING Bank N.V. and Standard Chartered Bank acted as joint lead arrangers and selling agents for Metrobank’s latest tier 2 issuance. Multinational Investment Bancorporation was the market maker and selling agent while Metrobank itself acted as limited selling agent.

Metrobank—the crown jewel of tycoon George Ty’s GT Capital group—reported consolidated resources of P1.4 trillion by the end of March.–Doris C. Dumlao