Ty family-led Metropolitan Bank & Trust Co. has raised P10.5 billion from a fresh foray into the local bond market, generating funds to help oil the needs of the economy while diversifying its funding base amid a challenging macroeconomic environment.
“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 corporations, middle market, SMEs (small and medium enterprises), and retail—and diversify the bank’s funding base,” Metrobank said in a statement on Friday.
The bonds, with a tenor of 1.25 years, carried a coupon rate of 3 percent a year. The original offer period of June 3 to 16 was cut short and closed within a day.
In a disclosure to the Philippine Stock Exchange, the local banking giant cited “strong demand from both institutional and retail clients, indicating the market’s continued confidence in the bank amid 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 acted as joint lead arrangers for this issuance.
Many banks have been tapping the local bond market to diversify their funding sources and reduce their reliance on volatile deposits as they serve the funding needs of consumers and business enterprises.
For its part, Metrobank has raised a total of P70.5 billion from peso bond offerings since November 2018. 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 a year.
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.
In the first quarter, Metrobank grew its net loan book by 6 percent year-on-year to P1.4 trillion, supported by the 8 percent growth in deposits to P1.7 trillion.