Metropolitan Bank & Trust Co. (Metrobank) said it has completed its $1 billion bond sale in the overseas market, attracting “overwhelming demand.”
The bonds with a tenor of five years and 10 years fetched a coupon rate of 5.375 percent for the shorter tenor and 5.5 percent for the longer tenor — higher by 110 basis points and 130 basis points, respectively, than the benchmark US Treasury notes rate.
The second largest private bank in the Philippines said the final order book was more than 11 times oversubscribed, with orders from global investors reaching $5.6 billion.
Moody’s gave the five- and 10-year bonds an investment grade rating of Baa2, at par with the Republic of the Philippines sovereign dollar debt.
Metrobank said it is the first local private bank to issue a long-dated bond at 10 years.
“This issuance established several records: the longest senior dated note by a private sector bank in the Philippines, the largest non-sovereign note issuance of $1 billion, and the tightest ever credit spreads on the 5-year tranche among non-sovereign Philippine issuers,” the bank said in a statement.
By geographical allocation, Metrobank said 86 percent of the investors came from Asia Pacific and 14 percent from Europe, Middle East and Africa.
By investor type, meanwhile, 73 percent was allocated to fund managers, 14 percent to banks/financial institutions and the remaining 13 percent to insurers, corporations and private banks, it added.
Fabian Dee, Metrobank president, said the result shows investors’ “strong confidence on Metrobank’s credit and track record in the Philippines.”
“This offering will fund the bank’s key growth initiatives as we continuously develop innovative financial solutions to serve our clients,” he said.
“We are grateful for the support shown by global investors in our return to the international bond market after a three-and-a-half-year hiatus. The results of this note offering is a clear indication of investors’ trust and confidence in the strongest bank in the Philippines,” said Fernand Antonio Tansingco, Metrobank head of the financial markets sector.
“The proceeds of this fund raising will enable the bank to support our growing pipeline of customer transactions as the Philippine economy accelerates its growth,” Tansingco added.
Proceeds of the bond issuance will be used to diversify the bank’s funding sources and establish a benchmark for Philippine bank credit in the international capital markets.
Bank of America Securities and UBS served as joint global coordinators. They were joined by MUFG Securities and First Metro Investment Corp. as joint bookrunners for the transaction.
This bond sale is part of Metrobank’s $2 billion medium term note program approved in 2017. Metrobank last tapped the international bond market in July 2020 when it raised $500 million as it issued 5.5-year bonds carrying a coupon of 2.125 percent.