Metropolitan Bank & Trust Company (Metrobank) is raising at least P5 billion worth of fresh funds from long-term negotiable certificates of time deposit (LTNCDs) to refinance existing debt and support expansion plans.
The LTNCD offering may be upsized depending on demand, the bank said in a disclosure to the Philippine Stock Exchange.
The seven-year LTNCDs carry a 3.50-percent annual yield rate payable quarterly. The offer will run from August 30 to September 12.
Selling LTNCDs is a way for banks to raise funds 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 lifespan of the certificate.
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 Corp. (PDIC) for up to P500,000.
ING Bank was appointed the sole arranger, bookrunner, and selling agent for Metrobank’s LTNCDs.
“The purpose of the issuance of the LTNCD is to diversify the maturity profile of funding sources and to support business expansion plans,” Juan Placido Mapa 3rd, Metrobank vice president and investor relations head, said in a text message.
Mapa said the bank’s expansion plans are anchored mostly on growing its loan books in relation to a three-year branch expansion program that calls for 30 branch openings a year towards 2018.
In the first six months of the year, the bank saw its lending business grew by 24 percent to P920.5 billion year-on-year.
Metrobank has opened nine new bank branches and installed 59 automated teller machines (ATM) so far this year, increasing its branch count to 954 and ATMs to 2,285.