Metrobank offers P5B in LTNCDs

MANILA, Philippines–Local banking giant Metropolitan Bank and Trust Co. launched on Tuesday an offering of least P5 billion worth of long-term negotiable certificates of deposits (LTNCD), taking advantage of ample liquidity in the financial market to generate long-term funding.

The LTNCDs, which will have a tenor of 5.5 years, are offered at a rate of 4 percent a year, payable on a quarterly basis, based on a disclosure to the Philippine Stock Exchange on Tuesday.

“We’re looking at a P5-billion size but it can increase if there’s strong demand,” Metrobank vice president and head of investor relations Juan Placido T. Mapa III said in a text message.

The offer period began on Tuesday and will run until Oct. 17.

The minimum investment size is P50,000 with increments of P50,000 thereafter.

Metrobank’s board earlier approved a program to raise as much as P20 billion from the sale of LTNCDs, which are negotiable certificates of time deposit and are tax exempt for qualified individuals if held for at least five years.

The LTNCDs are insured by the Philippine Deposit Insurance Corp. (PDIC) up to the maximum coverage per depositor, currently at P500,000.

These are bank products with long tenors which are offered to investors looking for a higher interest rate compared to regular savings accounts or shorter-term deposits.

Metrobank’s 5.5-year LTNCDs will mature in April 2020.

The bank has mandated The Hong Kong and Shanghai Banking Corp. Ltd. and ING Bank N.V., Manila branch as joint lead arrangers and selling agents for this transaction. Metrobank, First Metro Investment Corp. and Multinational Investment Bancorporation (MIB) also serve as selling agents for the offer.