Metropolitan Bank and Trust Co. (Metrobank) said it raised P8 billion from the offering of 5.5-year long-term negotiable certificates of deposits (LTNCDs). This constitutes the first tranche of the bank’s P20-billion fundraising.
Juan Placido Mapa 3rd, Metrobank investor relations head, said in a phone interview that the company is planning to issue the second tranche of the P20-billion LTNCDs “in a couple of weeks” given that the first tranche was more than two times oversubscribed.
“The BSP [Bangko Sentral ng Pilipinas] approved that we can issue this in six months, which can be divided into 5-year, 7-year and 10-year tranches,” Mapa told The Manila Times, adding that the issue period can extend up to the first quarter of 2015.
“Basically, we have six months to complete the issuance of the P20-billion LTNCD program. We don’t want to lump the P20 billion in one tranche. We’re going to issue the second 7-year tranche in the coming weeks but no definite date as of the moment,” he added.
Asked for the valuation of the second year tranche, Mapa said it is still subject to management and board discussions and approvals.
“The P20-billion LTNCDs is a set of long-term deposit products. It is a long term funding for the company, and we can match it with our long term assets,” he said.
In a statement, Metrobank said the first tranche was offered on October 7 to 17, and will be issued on October 24. The P8-billion LTNCDs bear an interest rate of 4 percent annually due April 2020. Minimum investment is P50,000, with increments of P50,000 thereafter.
Joint lead arrangers for the bank’s P20-billion fundraising are The Hongkong and Shanghai Banking Corp. Ltd. and the ING Bank N.V., Manila Branch. Metrobank, First Metro Investment Corp., and Multinational Investment Bancorp. will serve as selling agents.
The LTNCDs will also be listed on the Philippine Dealing and Exchange Corp.
Selling LTNCDs is a way for banks to raise funds, usually in huge amounts. The bank doing the fundraising is obliged to pay the face value of the certificate upon maturity, and produce periodic coupons or interest payments during the life of the deposit.
LTNCDs are tax-exempt for qualified individuals or institutions who hold them for at least five years. The notes are insured by the Philippine Deposit Insurance Corporation for up to P500,000.
Metrobank is the banking arm of businessman George Ty through conglomerate GT Capital Holdings Inc.