Metrobank seeks fresh P25B from term deposit offer

On the heels of a P60-billion capital boost program, Ty family-led Metropolitan Bank & Trust Co. plans to raise P25 billion more from a new offering of high-yielding deposits to diversify and lengthen its funding pool.

In a disclosure to the Philippine Stock Exchange on Thursday, Metrobank said its board of directors had approved the issuance of new long-term negotiable certificates of deposit (LTNCDs) worth P25 billion.

This will be issued in one or more tranches of at least P2 billion each and with tenors of 5.5 years up to 10 years, subject to regulatory approval and market conditions.

The LTNCDs will be listed on the Philippine Dealing & Exchange Corp.

“We’ve been regularly issuing LTNCDs in the last few years because we want to diversify funding sources and to obtain long-term funding,” Metrobank vice president and head of investor relations Juan Placido Mapa III said in a text message.

“The planned issuances under the proposed program still support those overall objectives,” Mapa added.

The last time Metrobank issued LTNCDs was in July 2017, raising P3.75 billion with a seven-year tenor. In September 2016, it issued P8.65 billion LTNCDs, likewise with a seven-year tenor.

LTNCDs are negotiable certificates of time deposit issued by banks. They usually have higher yields compared to regular time deposits or savings accounts.

Unlike regular time deposits, LTNCDs cannot be preterminated by holders. However, investors can negotiate or transfer their holdings in the secondary market prior to maturity. Interest on LTNCDs is tax-free for individual investors if the instrument is in the name of the individual holder and is held for at least five years.

Metrobank recently completed a P60-billion stock rights offering to support its medium-term expansion plan.