Metrobank set to issue $2B in notes

Ty family-led Metropolitan Bank & Trust Co. is set to issue up to $2 billion worth of debt paper to fund its expansion program.

In a disclosure to the Philippine Stock Exchange on Thursday, Metrobank said its board had approved the establishment of a medium-term note (MTN) program worth up to $2 billion or its equivalent in other currencies, including the Australian dollar, European euro, Japanese yen, British pound or Chinese yuan.

Metrobank said this program would afford the bank “maximum flexibility in accessing markets and maximizing opportunities to raise funding expediently.”

Pursuant to the MTN program, Metrobank said from time to time, it may issue, offer and sell notes in such form, amount, currency, tenor, number of tranches at such interest rate and under such other terms and conditions as the management of the bank may determine, approve or ratify.

Notes under the MTN program usually mature in five to 10 years.

A corporate MTN can be continuously offered by a company to investors through a dealer with investors being able to choose from differing maturities, ranging from nine months to 30 years.

This debt program is used by a company so it can have constant cash flows coming in from its debt offerings, allowing the issuer to customize its debt offerings to its financing needs.

Issuers typically use the shelf registration window of the Securities and Exchange Commission for the MTN.

Last year, the bank grew its loan book faster than industry and strategically repositioned its balance sheet to provide a steady source of recurring income.

Its total loan portfolio grew by 20 percent to P1.1 trillion last year, accounting for 57 percent of total assets versus 50 percent in the previous year.

The commercial segment led the lending growth, rising 22 percent year-on-year as the bank supported the long-term capital expenditure requirements of its corporate clients and the working capital needs of the middle market and small and medium enterprise (SME) customers.

The consumer segment maintained a growth of 16 percent, with auto loans growing fastest among the bank’s consumer assets.

The bank’s low-cost deposits sustained a high growth rate of 21 percent to reach P846 billion. Low-cost deposits—referring to current account and savings accounts—accounted for 61 percent of total deposits, up from 56 percent a year ago, providing the liquidity to support loan growth.