Metrobank plans P20B fund-raising

TY family-led Metropolitan Bank and Trust Co. (Metrobank) plans to raise as much as P20 billion from a new offering of high-yielding long-term deposits, taking advantage of ample liquidity in the financial system.

The board of Metrobank had approved the issuance of these long-term negotiable certificates of deposits (LTNCDs) in one or more tranches worth at least P10 billion, the bank disclosed to the Philippine Stock Exchange on Thursday.

The tenor was proposed within a range of 5.5 to as long as 10 years, subject to market conditions.

Joey Mapa, Metrobank’s head of investor relations, said that the rationale for the LTNCD offering was to “lock in long term funding and take advantage of the liquidity in the system and relatively low interest rates.”

The timing of issuance will be subject to regulatory approvals and market conditions, he said.

“We will apply for a program for one year and will most likely issue in tranches,” Mapa said.

LTNCDs are negotiable certificates of time deposits and are tax exempt for qualified individuals if held for at least five years. 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. These instruments are insured by the Philippine Deposit Insurance Corp. (PDIC) up to a maximum coverage per depositor, currently at P500,000.

The last time that Metrobank was in the LTNCD market was in 2014.

For this latest offering, the president of Metrobank Fabian Dee has been granted authority to appoint the arranger/s and required third parties for the issue. He was likewise given by the board authority to approve the pertinent details, including the timing of the launch, issue size, tenor, interest rate and denomination.