Metrobank to exercise call option on P5.5-B Tier 2 notes

MANILA, Philippines - Metropolitan Bank & Trust Co. (Metrobank), the main banking arm of the Ty family, will exercise its call option on its P5.5-billion Lower Tier 2 notes.

In a disclosure to the Philippine Stock Exchange, Metrobank head of investor relations Juan Placido Mapa III said the bank’s board approved Tuesday the conduct of the call.

He said Metrobank would undertake the call option on the notes with a rate of 7.75 percent on Oct. 4.

The call option feature is in accordance with the terms and conditions of the notes.

Mapa, however, said they would seek the approval of the Bangko Sentral ng Pilipinas (BSP) before carrying out the call option.

“The bank is currently in the process of securing BSP approval,” he said.

The Metrobank official said the board has also approved the issuance of up to $500 million Basel 3-compliant Tier 2 capital securities to proactively manage its capital base for growth and for refinancing of maturing capital notes.

The Basel 3 guidelines issued by the BSP in Jan. 15, 2003 requires that Tier-2 notes have a provision for the instrument to either be written off or converted to common equity upon occurrence of certain trigger events.

The BSP circular further stipulates that banks must make the necessary amendments to their articles of incorporation to accommodate such a conversion.

Metrobank said it has received  BSP approval to amend its articles of incorporation on the increase in authorized capital stock from P50 billion to P100 billion.

The increase would be divided into four billion common shares and one billion preferred shares, each with a par value of P20 per share.