Metrobank raises P18B via peso bond issue

Local banking giant Metropolitan Bank & Trust Co. has raised P18 billion from the reopening of two-year bonds, the issuance of which was upsized by more than three times the original offer to meet “overwhelming” demand from investors.

Metrobank reopened to the public its existing two-year bonds at an effective interest rate of 7 percent a year, the bank disclosed to the Philippine Stock Exchange.

This serves as a landmark transaction as it is the first peso-denominated bond issuance by a Philippine bank and the largest ever reissuance of existing local bonds.

The bonds were issued and consolidated to form a single series with the recently issued P10-billion fixed-rate bonds, increasing the total raised from the bonds to P28 billion, the largest peso-denominated bank bonds in the country to date.

The reissuance was priced at a slight premium, having an effective interest rate of 7 percent and quarterly coupon payments as the bank cited the robust investor demand and strong credit that had led to a decline in the overall cost of the bond and credit spread. Metrobank’s original P10-billion two-year bond issuance was priced to yield 7.15 percent per annum.

“This serves as a significant milestone for Metrobank which has consecutively proven its ability to always be the first to market, and pioneer a reopening following its successful maiden issuance last November. This transaction has been very timely for Metrobank as we continue to prepare for a strong start coming into 2019,” Metrobank president Fabian Dee said.

Standard Chartered Bank (SCB) Philippines chief executive officer Lynette Ortiz added: “Standard Chartered Bank is pleased to be part of the first-ever reissuance of a Philippine peso bank bond. Through this reissuance, Metrobank has shown its flexibility and swiftness in being able to tap the local capital markets when the opportunity arises and when market conditions are constructive.”

SCB was the sole arranger and bookrunner for the transaction, while the selling agents were Metrobank, SCB and First Metro Investment Corp.

These bond issuances are part of Metrobank’s P100-billion bond and commercial paper program. With the reopening of the bonds, investors who were not able to participate in the recent offering got a second chance to subscribe. —DORIS DUMLAO-ABADILLA