Bangko Sentral green-lights Metrobank's $500M worth of Tier 2 notes

Metropolitan Bank & Trust Company (Metrobank) on Wednesday said it will issue Basel 3 compliant Tier 2 notes valued at $500 million – denominated either in pesos or dollars – after getting the go signal from Bangko Sentral ng Pilipinas.

 

A recent Bangko Sentral resolution amends the terms and conditions of a previous approval Metrobank in favor of the bank by allowing its to issue either dollar- or peso-denominated notes, Metrobank said in a disclosure to the Philippine Stock Exchange.

 

"A peso Tier 2 Note issuance will allow the Bank to proactively manage its capital base to support its continued growth, and to refinance capital securities that have been de-recognized upon Basel III adoption this year," the disclosure read.

 

Metrobank has mandated ING Bank N.V. Manila Branch and Standard Chartered Bank as joint lead arrangers for the peso transaction.

 

Juan Placido Mapa III, head of investor relations, said the amendment gives Metrobank the choice to issue debt papers in peso or dollar terms to take advantage of better rates. 

 

"The key word there is flexibility. If rates are better in one than the other, we can offer the notes in either peso or dollar or both," he said.

 

In April, the Metrobank board approved the issuance of $500 million worth of Tier 2 capital notes to meet the Basel III guidelines on capitalization.

 

"The Tier 2 notes will still be valued at $500 million, which can still be $500 million or the equivalent in peso terms or divided into dollar and peso amounts," Mapa said.

 

"We are already compliant with Basel III with the sale of Toyota Motor Philippines and Global Business Power stakes. The new Tier 2 notes will allow us to retire the old-style Tier 2 notes and recapitalize the bank," Mapa said, referring to the non-compliant notes.

 

Metrobank sold its remaining 15 percent stake in Toyota Motors Philippines Corp. in January 2013 and its 20 percent in Global Business Power Corporation through subsidiary First Metro Investment Corporation in June 2013.

 

In 2012, Bangko Sentral said it will implement by January 1, 2014 the Basel III standards, or the new global benchmarks on capital conversion, common equity Tier 1, and total Tier ratio that will impact on banks’ debts and asset positions. – VS, GMA News