Metropolitan Bank & Trust Co. (Metrobank) Raises Landmark USD 1 Billion from International Debt Capital Markets

Metropolitan Bank & Trust Co. (Metrobank) successfully completed its issuance of a dual tranche of 5- and 10-year US dollar-denominated notes, despite considerable demand. 

The 5-year and 10-year bonds were priced 110 basis points and 130 basis points higher than the benchmark U.S. Treasury notes have fixed coupon rates of 5.375% and 5.50%, respectively. The final order book was more than 11 times oversubscribed, totaling USD 5.6 billion from investors worldwide. Metrobank is the first private bank to issue a long-term 10-year bond. Moody's assigned the 5- and 10-year notes an investment grade rating of Baa2, on line with the Republic of the Philippines' sovereign dollar debt.
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This issuance set numerous milestones, including the longest senior-dated note by a private sector bank in the Philippines, the largest non-sovereign note issuance of USD 1 billion, and the tightest credit spreads on the 5-year tranche among non-sovereign Philippine issuers. According to geographical distribution, 86% of investors came from Asia Pacific (APAC) and 14% from Europe, the Middle East, and Africa (EMEA). In terms of investor type, 73% went to fund managers, 14% to banks and financial institutions, and the remaining 13% to insurers, businesses, and private banks.

“We are positively overwhelmed with the high interest we received from global investors for this issuance. It shows their 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,” said Fabian Dee, President of Metrobank.

“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. 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” said Fernand Antonio Tansingco, Head of the Financial Markets Sector.
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The proceeds from the bond issuance would be used to diversify the bank's funding sources and set a benchmark for Philippine bank credit in foreign capital markets.

Bank of America Securities and UBS served as joint global coordinators and bookrunners for the transaction, with MUFG Securities and First Metro Investment Corp. acting as joint bookrunners.
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This offering is part of the bank's USD 2.0 billion Medium Term Note Program, which was approved by the Board of Directors on March 22, 2017. Metrobank last used the foreign bond market in July 2020 to obtain USD 500 million with the offering of 5.5-year bonds with a fixed coupon of 2.125%, payable semi-annually.
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Metrobank reported record earnings of PHP 42.2 billion in 2023, up 28.9% year on year. This translated into a 12.5% return on equity (ROE), up from 10.3% in 2022. The Common Equity Tier 1 (CET1) ratio of 17.4% exceeds the minimal regulatory threshold. The bank's high profitability and considerable capital base encouraged the Board of Directors to declare a total cash dividend of PHP5.00 per share for the year. The regular dividend was raised from PHP1.60 to PHP3.00 per share and will be paid out semi-annually at PHP1.50 per share. In addition, a special cash dividend of PHP 2.00 per share was issued.
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Metrobank, the country's second-largest private universal bank, offers personalized financial products and services to help individuals and businesses achieve their full potential. It has a large integrated network that includes over 940 domestic branches nationally, over 2,300 ATMs, and more than 30 international branches, subsidiaries, and representative offices.