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METROPOLITAN Bank and Trust Co. has received a below-investment
grade rating from Moody’s Investors Service for the Philippine
lender’s planned borrowing through the sale of so-called
subordinated notes.
The said debt papers are subordinated since
bondholders’ claims would be third in line after senior creditors
and bank depositors’ claims are settled.
In a statement, Moody’s announced on Monday
that it would assign a Baa3 rating and a stable outlook to the
proposed debt note issuance of Metrobank. A financial instrument
accorded a Baa3 rating is one that lacks outstanding investment
characteristics and instead is considered speculative.
“Moody’s ratings for [Metrobank] reflect the
bank’s dominant size, established brand name and healthy financial
fundamentals. Also, the ratings are based upon Moody’s assessment
that the systemic support probability for [the bank] is very
high,” the rating firm said.
Earlier, the Bangko Sentral ng Pilipinas
approved Metrobank’s plan to issue P10-billion worth of
subordinated notes from October to November. Proceeds from the
borrowing would be used to refinance the lender’s maturing
obligations.
The country’s largest bank said its assets
stood at P669 billion at end-June.
The debt notes would fall due on 2017 but can be
redeemed after 2012, and would represent direct, unconditional
subordinated and unsecured obligations of the bank and qualify as
lower Tier 2 capital, Moody’s said.
The IOUs also contain a step-up interest rate
feature that would be activated in 2012 if these are not redeemed.
--Likha C. Cuevas-Miel
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