MANILA, Philippines — Metropolitan Bank & Trust Co. (Metrobank) and Ayala-led Bank of the Philippine Islands (BPI) are returning to the onshore debt market to raise additional funds via the issuance of bonds and commercial papers.
Metrobank said the fund raising activity was approved by its board of directors last Wednesday to augment its loan book and at the same time expand is funding sources.
The peso-denominated bonds and commercial papers with tenors of at least three months would be issued in one or more tranches.
“The objective of the program is to support Metrobank’s lending activities and to diversify funding sources. Timing of the issuances will be subject to market conditions,” the bank said in a disclosure to the Philippine Stock Exchange (PSE).
Last April, the Ty-led bank raised P60 billion from the sale of new shares to existing shareholders led by GT Ca pital Holdings through a stock rights offer to further enhance its capital ratios, keeping it well above the Basel III requirements.
It is currently undertaking the first tranche of its P25 billion long-term negotiable certificates of time deposits (LTNCDs) program until Sept. 28. The debt instrument with a tenor of between 5.5 and 10 years has an interest rate of 5.375 percent per annum.
The bank has so far raised P26.65 billion from previous issuances of LTNCDs including P8 billion in October 2014, P6.25 billion in November 2014, P8.65 billion in September 2016, and P3.75 billion in July last year.
In a separate disclosure to the PSE, BPI said its board of directors approved the establishment of a peso bond and commercial program in the aggregate amount of P50 billion.
BPI raised P50 billion via a stock rights offer last May, making the country’s third largest bank in terms of assets as one of the best capitalized banks in the country.
Last month, the bank controlled by conglomerate Ayala Corp. raised $600 million out of is $2 billion medium term note program to diversify its funding sources and lengthen the maturity profile of its borrowings. This was the largest ever debt issuance by a Philippine bank in the offshore debt market.
More banks are now shifting to the issuance of bonds and commercial papers instead of LTNCDs after the Bangko Sentral ng Pilipinas (BSP) released the enhanced guidelines for the fund raising activity.
Banks that have announced plans to issue bonds and commercial papers include BDO Unibank of retail and banking magnate Henry Sy with P100 billion, Philippine National Bank (PNB) of tobacco and airline giant Lucio Tan with P25 billion, and Aboitiz-led Union Bank of the Philippines.