Metrobank raises $1B from international debt note sale

MANILA, Philippines  — The Ty family’s Metropolitan Bank & Trust Co. (Metrobank) marked its successful return to the international debt market with a $1-billion fundraising haul after attracting “overwhelming” demand from shareholders.

In a stock exchange filing on Thursday, Metrobank announced the conclusion of its dual-tranche  5-year and 10-year US dollar denominated notes carrying fixed coupon rates of 5.375 percent and 5.50 percent, respectively.

Originally aiming to raise $500 million, the strong demand led to the final amount being doubled. The offering was oversubscribed by 11 times, reaching $5.6 billion, Metrobank said.

“We are positively overwhelmed with the high interest we received from global investors for this issuance. It shows their strong confidence in Metrobank’s credit and track record in the Philippines,” Metrobank president Fabian Dee said in the filing.

Investment grade rating

“This offering will fund the bank’s key growth initiatives as we continuously develop innovative financial solutions to serve our clients,” he added.

READ: Metrobank to pay record dividends as 2023 earnings post 29% growth

Bank of America Securities and UBS were the joint global coordinators and joint bookrunners for the transaction. MUFG Securities and First Metro Investment Corp. acted as joint bookrunners.

Moody’s assigned the 5- and 10-year bonds an investment grade rating of Baa2, at par with the Philippines government’s sovereign dollar debt rating.

Metrobank said the offer marked the “longest senior dated note by a private sector bank in the Philippines, the largest non-sovereign note issuance of $1 billion, and the tightest ever credit spreads on the 5-year tranche among non-sovereign Philippine issuers”.

The distribution of investors for the issuance showed that 86 percent were from the Asia Pacific region and 14 percent from Europe, the Middle East, and Africa (EMEA).

High investor interest

In terms of investor type, 73 percent of the allocation went to fund managers, 14 percent to banks/financial institutions, and the remaining 13 percent to a mix of insurers, corporations, and private banks.

“We are grateful for the support shown by global investors in our return to the international bond market after a three-and-a-half-year hiatus,” said Fernand Antonio Tansingco, head of the financial markets sector at Metrobank.

READ: Metrobank to raise at least $500M via debt note offer

“The results of this note offering is a clear indication of investors’ trust and confidence in the strongest bank in the Philippines. The proceeds of this fund raising will enable the bank to support our growing pipeline of customer transactions as the Philippine economy accelerates its growth,” he added.

Metrobank previously tapped the international bond market in July 2020, raising $500 million through the issuance of 5.5-year bonds, which paid a fixed coupon rate of 2.125 percent.