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Metrobank raises $500M via offshore senior notes issuance

/ 05:18 AM July 09, 2020

Ty family-led Metropolitan Bank & Trust Co. has tapped the offshore financial market for the first time in nearly two decades, raising $500 million from its maiden bond offering at a coupon rate that matched the best rate obtained by a Philippine borrower.

Metrobank sold 5.5-year senior notes at a fixed coupon rate of 2.125 percent a year, the same rate obtained by its peer, BDO Unibank, which had come to market at around the same time.

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The last time Metrobank had tapped the offshore market was 17 years ago, when it issued subordinated notes qualifying as tier 2 or supplementary capi­tal. The $500-million issuance is the bank’s very first offshore senior notes issuance.

This deal allowed Metrobank to tap longer-term offshore funding, diversify funding sour­ces and finance maturing short-term borrowings, the bank said in a disclosure to the Philippine Stock Exchange on Wednesday.

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The notes were priced at a tighter spread of 200 basis points over comparative US treasuries .

The order book was five times oversubscribed versus the base offer, with 120 investors at its peak, which is seen to reflect investors’ confidence on Metrobank’s creditworthiness. Metrobank is rated Baa2 (stable) by Moody’s Investor Service and BBB- (stable) by Fitch Ratings, both of which are investment grade ratings.

“We are very pleased with the outcome of the issuance which confirms the confidence and strength of Metrobank’s name and track record in the Philippines. This bond issuance will further enhance our business strength and optimize our capital structure especially in this current market environment,” Metrobank president Fabian Dee said in a statement.

In terms of distribution, the order book was allocated predominantly to Asia, with a share of 81 percent, while the remaining 19 percent was taken up by investors from Europe, Middle East and Africa.

UBS AG Hong Kong branch and First Metro Investment Corp. were the joint global coordinators and joint bookrunners for the deal. Mitsubishi UFJ Financial Group and SMBC Nikko Securities Inc. were the joint lead managers.

Founded in 1962, Metrobank is currently the second largest bank in the Philippines in terms of total assets which stood at P2.4 trillion as of end-March.

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