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Business

Metrobank raises P16 B for Basel III compliance

Ted P. Torres - The Philippine Star

MANILA, Philippines - The Metropolitan Bank & Trust Co. (Metrobank) has raised P16 billion from the issuance of notes to comply with the Basel III capital framework being imposed by the Bangko Sentral ng Pilipinas (BSP).

The transaction was 2.7 times oversubscribed with strong demand from both institutional and retail investors, prompting Metrobank to close the offer period three days early and to double the issue size to P16 billion to accommodate majority of customer demand. 

The settlement date is set on March 27, 2014.    

Metrobank president Fabian S. Dee said that they were overwhelmingly pleased with the better-than-expected demand for the notes and the strong display of investor confidence in Metrobank. 

“We would like to thank the investing community for their support.  Proceeds from this transaction will help us capitalize on growth opportunities amidst strong economic prospects,” Dee said.

The newly issued Tier 2 Notes were priced at a coupon rate of 5.375 percent, or 151 basis points over the five-year PDST-F government benchmark.  

The P16-billion debt paper matures in June 2024 but the Metrobank holds a call option to redeem as early as June 2019. 

“The notes are the second Basel III-compliant instrument issued in the domestic market with a loss absorption feature.  This allows the instrument to be recognized as bank capital in accordance with Basel III standards,” the bank president added.

Metrobank tapped ING Bank N.V.-Manila Branch and Standard Chartered Bank as joint lead arrangers and selling agents. The First Metro Investment Corp. (FMIC) and Metrobank are limited selling agents. Multinational Investment Bancorp (MIB) served as market maker and selling agent. 

In an earlier disclosure to the Philippine Stock Exchange (PSE), Metrobank said that it was eyeing some $500-million both to comply with the Basel III capital framework as enforced by the BSP.

Aside from being capital compliant, the bank is moving to expand putting up a minimum 25 to a maximum 34 more branches mostly outside Metro Manila.

It has a network of 856 branches and close to 2,000 ATMs nationwide. In fact, it already opened four branches in the first two months of 2014.

Likewise, Metrobank continued its aggressive expansion towards the regional market, though strategic alliances with regional banks. In fact, it has increased its alliances with Japanese banks to serve the needs of Japanese locators in industrial parks and export processing centers.

It inked business alliance agreements with several Japanese financial institutions in support of expansion plans of Japanese SMEs into the Philippines.

Metrobank forged partnerships with the Japan-based banks namely Hyakugo Bank Ltd., Ogaki Kyoritsu Bank Ltd., The 77 Bank, Okazaki Shinkin Bank, Akita Bank, Iyo Bank, Chugoku Bank, and Hyakujushi Bank.

With this partnership, the Japanese enterprises will have access to financing and will enable them to open accounts in the local currency. It will also provide financial advisory services to further guide the Japanese SMEs in their expansion.

Metrobank has a strong Japanese linkage through its Metrobank Tokyo Branch as well as a dedicated Japan Desk within its Corporate Banking Group that specializes in handling the needs and addressing the concerns of Japanese businesses operating in the Philippines.

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