Metrobank to redeem P16-B IOUs

Awash in cash from recent local bond offerings, Metropolitan Bank & Trust Co. plans to redeem ahead of maturity P16 billion worth of debt notes qualifying as tier 2 capital.

The bank’s board recently approved a plan to exercise the call option of the P16-billion subordinated debt on June 27, 2019, Metrobank said in a disclosure to the Philippine Stock Exchange.

The call option is subject to the approval of the Bangko Sentral ng Pilipinas (BSP).

The P16-billion notes were issued in 2014 at a coupon rate of 5.375 percent a year. They were the second Basel 3-compliant instrument issued in the local market with a loss absorption feature. The feature allows the instrument to be recognized as bank capital in accordance with Basel 3 standards.

The tier 2 notes will mature in June 2024 but Metrobank has the call option to redeem them early this June 2019.

Last year, Metrobank set up a P100-billion bond and commercial paper program to support lending activities and diversify funding sources.  About P28 billion had so far been raised from this new funding program.—DORIS DUMLAO-ABADILLA