Metropolitan Bank and Trust Co. said on Monday it has raised P16 billion from the issuance of Basel III-compliant Tier-2 notes in an offering that was oversubscribed 2.7 times, reflecting strong investor confidence in one of the country’s biggest banks.
In a statement, Metrobank said strong demand from both institutional and retail investors prompted it to close the offer period three days early.
“The size of the order book prompted 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,” the bank 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. PDST-F is one of the Treasury Reference Rates published by the Philippine Dealing and Exchange Corp. (PDEx) and is commonly used as a benchmark for the issuance of fixed income securities like bonds and preferred shares.
Metrobank said that the notes mature in June 2024, although it has the call option to redeem the notes early in June 2019.
“We are very pleased with the overwhelming demand for our 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,” Metrobank president Fabian Dee said.
Metrobank’s Tier-2 note issue is only 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.
Basel III is a framework designed to strengthen the banking sector’s capacity to absorb shocks, enhance the management of risk, and increase transparency.