Metrobank raises P10.5B from new bond foray

Ty family-led Metropolitan Bank & Trust Co. has raised P10.5 billion from a fresh bond market foray that was warmly received by investors despite the challenging macroeconomic environment.

The bonds, with a tenor of 1.25 years, carried a coupon rate of 3 percent per annum.

“The bank is very pleased that the investing public responded enthusiastically to our bond offering, allowing us to reach our target funding in one day. The proceeds from the bond issue will be used to further support our lending activities – helping clients from corporates, middle market, SMEs (small and medium enterprises), and retail – and to diversify the bank’s funding base,” Metrobank said in a statement on Friday.

The initial offer period of June 3 to 16 was cut short and closed within a day.

In a disclosure to the Philippine Stock Exchange, Metrobank cited “strong investor demand from both institutional and retail clients, indicating the market’s continued confidence in the bank amidst the current economic situation.”

The bonds, which will have quarterly interest payments, will be listed on the Philippine Dealing and Exchange Corp on June 24.

This is the sixth issue out of the P100 billion bond and commercial paper program approved by Metrobank’s board.

First Metro Investment Corp., ING Bank N.V., Manila branch and Standard Chartered Bank (SCB) acted as joint lead arrangers for this issuance.

Many banks are now tapping the local bond market to diversify their funding sources and reduce their reliance on volatile deposits as they oil the funding needs of the economy.

For its part, Metrobank has raised a total of P70.5 billion from peso bond offerings since November 2018. Prior to this latest bond foray, Metrobank’s last bond float was in October 2019 when it raised P13.75 billion from an offering of 3.5-year peso bonds that were priced to yield 4.5 percent per annum.

As of March 2020, Metrobank had an asset base of P2.4 trillion and total equity of P304.5 billion. Its total capital adequacy ratio stood at 17.6 percent of risk assets while common equity tier 1 ratio ended at 16.3 percent of risk assets, well above minimum requirements.