George Ty-owned Metropolitan Bank and Trust Company (Metrobank) started issuing on Tuesday its long-term negotiable certificates of deposits (LTNCDs) to raise P20 billion for the bank’s capital requirements. The offer will end on October 17.
The LTNCDs, to mature in five and a half years or by April 2020, will have an interest rate of 4 percent per annum payable quarterly.
Metrobank pegged the minimum investment at P50,000, with increments of P50,000 thereafter.
Joint lead arrangers and selling agents are The Hongkong and Shanghai Banking Corp. Ltd. and the ING Bank N.V., Manila Branch, while Metrobank, First Metro Investment Corp. and Multinational Investment Bancorp. serve as selling agents.
Selling LTNCDs is way for banks to raise funds, usually in huge amounts. The bank is obliged to pay the face value of the certificate upon maturity, and produce periodic coupon or interest payments during the lift of the deposit.
As an investment, LTNCDs are tax-exempt for qualified individuals or institutions if held for at least five years and are insured by the Philippine Deposit Insurance Corporation (PDIC) for up to P500,000.
LTNCDs cannot be pre-terminated like regular time deposits. These certificates, however, may also be sold in the secondary market.
Metrobank is the banking arm of businessman George Ty through conglomerate GT Capital Holdings Inc.
Aside from banking, GT Capital has interests in the automotive sector (Toyota Motor Philippines), real estate (Federal Land Inc.), power (Global Business Power Corp.), insurance (Philippine AXA Life Insurance Corp.), and non-life insurance (Charter Ping An Insurance Corp.).