MANILA, Philippines — Metropolitan Bank & Trust Co. (Metrobank) raised P10 billion via the issuance of fixed rate bonds, the first bank to heed the call of the Bangko Sentral ng Pilipinas (BSP) to shift to the issuance of bonds.
Metrobank president Fabian Dee said the listed bank is proud to once again be a trailblazer in the local bond market after issuing the first tranche of its P100-billion bond and commercial paper program.
“Our hope is that this issuance paves the way for a robust market for bank- issued bonds in the near future. We are grateful to the BSP and the Securities and Exchange Commission for allowing this opportunity to diversify our sources of liquidity to fund our growth prospects. We are also thankful to our investors for their confidence and overwhelming support of our initiatives,” Dee said.
The bond issuance marks the first ever by a Philippine bank under BSP Circulars 975 and 1010 that allowed banks to tap the domestic capital market as an alternative funding source. It is also the first bank bond to be priced under the new Bloomberg Valuation Service (BVAL) benchmark.
The two-year bonds fetched an interest of 7.15 percent. Following the strong demand during the book building process, the offering was almost 10 times oversubscribed as orders reached as high as P19.63 billion against initial target issue size of P2 billion, prompting an upsize to P10 billion.
Lynette Ortiz, CEO of Standard Chartered Bank Philippines, said other banks are expected to issue bonds and commercial papers after the maiden issuance by Metrobank.
“This is a major development in deepening the local capital markets space as we expect other banks to follow-suit. This maiden issuance allows Metrobank to establish its own credit curve and will serve as a benchmark not only for its future issuances, but also for other bank issuers,” Ortiz said.
Standard Chartered Bank acted as sole arranger as well as selling agent and market maker for the transaction. Other selling agents were Metrobank and First Metro Investment Corp. (FMIC), while Union Bank of the Philippines was another market maker.
“This is the second capital markets transaction we arranged for Metrobank this year and the success of both is a true testament to Metrobank’s strong position and credit quality,” Ortiz said.