BSP OKs Metrobank’s P25-billion LTNCD issue

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has given Metropolitan Bank and Trust Co. (Metrobank) the green light to raise as much as P25 billion from the issuance of long term negotiable certificates of deposits (LTNCDs).

In a disclosure to the Philippine Stock Exchange (PSE), Metrobank vice president Juan Placido Mapa said Metrobank received the approval from the BSP for the fund raising activity yesterday.

Mapa said Metrobank is set to issue the LTNCDs with a tenor of between 5.5 and 10 years in one or more tranches of at least P2 billion per tranche to be listed on the Philippine Dealing and Exchange Corp. (PDEx).

“Timing of the first tranche of LTNCDs will be subject to market conditions,” he said.

The planned fund raising activity in the onshore market aims to diversify the maturity profile of funding sources and support business expansion plans of the bank.

Metrobank has so far raised P26.65 billion via the issuance of LTNCDs. It initially raised P8 billion in October 2014 followed by P6.25 billion in November 2014, P8.65 billion in September 2016, and P3.75 billion in July last year.

LTNCDs have been an effective way for banks to raise cost-effective funding, while offering a new investment product to their own deposit base, most of whom are looking for long term assets that provide higher yields than traditional time deposits.