Metrobank to offer up to P20B in long-term negotiable time deposits

MANILA, Philippines – In a bid to make the most out of the liquidity in the market at present, listed Metropolitan Bank & Trust Company, better known as Metrobank, is raising P20 billion in fresh equity.

In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday, June 22, Metrobank said that its planned issuance of Long Term Negotiable Certificates of Time Deposit (LTNCDs) was approved by the bank’s Board of Directors and could be done in one or more tranches.

These LTNCDs would have a tenor of 5.5 up to 10 years and would be issued depending on market conditions.

LTNCDs offer investors higher interest rates compared to regular time deposits due to their longer maturity period. Unlike regular deposits, LTNCDs cannot be pre-terminated but they can be sold on secondary markets.

The offering is aimed at taking advantage of the strong liquidity in the system, said Metrobank vice president and head of investor relations Juan Placido Mapa III.

“The rationale for the LTNCD issuance is to lock in long-term funding and take advantage of the liquidity in the system and relatively low interest rates,” he explained.

Mapa said the timing of the issuance will be subject to regulatory approvals and market conditions. He added that “the firm will apply for a program for one year and will most likely issue in tranches.”

The Bangko Sentral ng Pilipinas (BSP) left its key interest rates unchanged following a meeting by its Monetary Board on Thursday, June 23.

The meeting was the first since it cut interest rates last month with its implementation of an interest rate corridor. That had been done in part to provide an enabling environment for increased money market transactions.

Metrobank, the country’s second largest in terms of assets, posted a 3% increase in net profit to P5.25 billion in the first quarter of 2016 on higher interest income and treasury gains. – Rappler.com