Metrobank lists P10-B bonds on PDEx

Ty family-led Metropolitan Bank & Trust Co. announced the listing of its P10-billion bonds on fixed income trading platform Philippine Dealing and Exchange Corp.

Metrobank’s bonds carried an interest rate of 7.15 percent a year for a tenor of two years.
This is part of the bank’s P100-billion bond and commercial paper program.

The bond issuance marks the first ever by a Philippine bank under Bangko Sentral ng Pilipinas Circulars 975 and 1010 that allow banks to tap the domestic capital market as an alternative funding source.

“We are proud to once again be a trailblazer in the local bond market. Our hope is that this issuance paves the way for a robust market for bank-issued bonds in the near future,” Metrobank president Fabian Dee said in a statement.

Citing strong demand during the book-building process, Metrobank said the offering was almost 10 times oversubscribed as orders reached P19.63 billion against initial target issue size of P2 billion. This prompted the bank to upsize the issue to P10 billion.

“This is a major development in deepening the local capital markets space as we expect other banks to follow suit. This maiden issuance allows Metrobank to establish its own credit curve and will serve as a benchmark not only for its future issuances but also for other bank issuers. This is the second capital markets transaction we arranged for Metrobank this year and the success of both is a true testament to Metrobank’s strong position and credit quality,” said Lynette Ortiz, chief executive officer of Standard Chartered Bank Philippines.

Standard Chartered Bank was the sole arranger as well as selling agent and market maker for the transaction. Other selling agents were Metrobank and First Metro Investment Corp., while Union Bank of the Philippines was another market maker.

This 23rd listing for the year at PDEx also marks the first corporate bond listing on the new PDEx fixed income trading system, Bloomberg FIQ trading.

PDEx president Antonino Nakpil said: “It is fitting that these ‘firsts’ are achieved by Metrobank, the first bank to list its securities in the organized market back in May 2009, the first bank to issue and list LTNCTDs (long-term negotiable certificates of time deposits) under the clarified fiscal framework in 2014. And with this issue, it is first again to utilize the guidelines and break in the listing process in the new trading system.”

SEC Commissioner Ephyro Luis Amatong said: “We look forward to Metrobank’s follow-on issuances as they moved toward fulfilling their P100 billion of planned borrowing. Today’s issuance of bank bonds does not simply represent a new funding instrument for banks. Rather, it is one aspect of a broader, domestic capital market reform effort which involves close cooperation among the SEC, BSP, and the Bureau of the Treasury.”

The listing of its new bond brought the total face amount of Metrobank’s instruments listed on PDEx to P45.33 billion, the total face amount of new bonds listed on PDEx for this year to P184.39 billion, and the total face amount of corporate bonds listed on PDEx to P976.27 billion, an increase of 23.18 percent over the end-2017 level.