Metrobank raises record $1 billion from international bond market

MANILA, Philippines — Metropolitan Bank & Trust Co. (Metrobank) has raised $1 billion as investors gobbled up its dual tranche offering of five and 10-year  dollar-denominated notes as part of its return to the offshore debt market.

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

The bonds were priced at 110 basis points and 130 basis points above the benchmark US Treasury notes, carrying fixed coupon rates of 5.375 percent and 5.50 percent, respectively.

The final order book was more than 11 times oversubscribed, reaching $5.6 billion from investors globally.

By geographical allocation, the   bank said 86 percent of the investors came from Asia-Pacific and 14 percent from Europe, Middle East and Africa.

By investor type, Metrobank said 73 percent was allocated to fund managers, 14 percent to banks and 13 percent to insurers, corporations and private banks.

Metrobank is the first private bank to issue a long-dated 10-year bond.

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

This issuance established several records: 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 five-year tranche among non-sovereign Philippine issuers.

The proceeds from the fundraising activity will be used to diversify the bank’s funding sources and establish a benchmark for Philippine bank credit in the international capital markets.

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

This issuance is part of the Metrobank’s $2 billion medium-term note program approved in March 2017.

Fernand Antonio Tansingco, head of the financial markets sector at Metrobank, said proceeds would help the bank support its growing pipeline of customer transactions as the country’s economic growth accelerates.

“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. The result of this note offering is a clear indication of investors’ trust and confidence in the strongesat bank in the Philippines,” Tansingco said.

The bank last tapped the international bond market in July 2020 when it raised $500 million from the issuance of 5.5-year bonds.

Metrobank grew its net income by 28.9 percent to a record P42.24 billion in 2023 from P32.78 billion in 2022, driven by asset expansion, higher margins, improving efficiency levels and better asset quality.

The bank has an extensive consolidated network that spans over 940 domestic branches nationwide, more than 2,300 ATMs, and above 30 foreign branches, subsidiaries, and representative offices.