Metrobank raising P25 B via LTNCD issue

MANILA, Philippines — Metropolitan Bank and Trust Co. (Metrobank) is tapping the onshore debt market to raise as much as P25 billion from the issuance of long term negotiable certificates of deposits (LTNCDs).

In a disclosure to the Philippine Stock Exchange (PSE), Metrobank vice president and head of investor relations Juan Placido Mapa said the bank’s fund raising was approved by the bank’s board of directors last Wednesday.

Mapa said Metrobank is set to issue the LTNCDs with a tenor of between five and 10 years in one or more tranches of at least P2 billion per tranche to be listed on the Philippine Dealing and Exchange Corp. (PDEx).

He said the issuance is still subject to regulatory approval as well as market conditions.

The bank has authorized its president Fabian Dee or the head of financial and control, as well as financial markets sectors to appoint the arrangers and required third parties for the issue, with authority to approve the pertinent details, including the timing of the launch, issue size, tenor, interest rate and denomination.

Metrobank has so far raised P26.65 billion via the issuance of LTNCDs. It initially raised P8 billion in October 2014 followed by P6.25 billion in November 2014, P8.65 billion in September 2016 and P3.75 billion in July last year.

“We have regularly been issuing LTNCDs in the past few years. The proposed LTNCD program is part of our overall objective of diversifying funding sources and raising long term deposits,” Mapa told The STAR.

Metrobank earlier raised P60 billion from the sale of new shares to existing shareholders led by GT Capital Holdings.

It intends to capitalize on the growth opportunities of large cap corporates and especially in its core franchise, the middle market, and small to medium enterprises.

Metrobank said the robust growth of the Philippines would continue to support loan expansion across the various segments of the economy.

The Ty-led bank said the fund raising exercise would allow Metrobank to pursue these business prospects to sustain the loan growth momentum, leveraging on the bank’s sales and distribution network that has rapidly expanded in preceding years.

Likewise, a portion of the proceeds of the fund raising activity would be used to purchase the remaining 20 percent equity stake of ANZ Funds Pty Ltd. in Metrobank Card Corp. (MCC) by the third quarter.

The bank has acquired the 20 percent interest of its foreign joint venture partner for P7.4 billion after getting the approval from the Bangko Sentral ng Pilipinas (BSP) last December.

After the transaction, MCC would b a wholly-owned subsidiary of Metrobank. It is the industry leader in terms of cards-in-force and receivables based on the latest data from the Credit Card Association of the Philippines (CCAP).

Furthermore, Metrobank said the additional capital would further enhance its capital ratios, keeping it well above the Basel III requirements.

The Bank had a total capital adequacy ratio of 18.1 percent, and common equity tier 1 ratio of 15.6 percent as of end-December, both ratios are above the BSP requirements, inclusive of the domestic systemically important bank (DSIB) buffer.