PSBank redeeming P3 B Tier 2 notes ahead of schedule

Philippine Savings Bank (PSBank), a unit of Ty-led Metropolitan Bank & Trust Co. (Metrobank), is repaying P3 billion in debt ahead of schedule to avoid paying a step-up interest rate.

PSBank president Jose Vicente Alde said in a disclosure to the Philippine Stock Exchange (PSE) the bank’s board of directors passed a resolution last Feb. 15 approving a request to exercise the option to call its unsecured subordinated Tier 2 notes on May 23, 2014.

The Tier 2 notes with a maturity of 10 years and three months from the issue date fetched a coupon rate of 5.5 percent per annum.

He said the debt scheduled to mature on Aug. 23, 2024 is callable on Aug. 23, 2019.

Alde said the redemption of the debt is subject to an approval from the Bangko Sentral ng Pilipinas (BSP).

Last January, PSBank raised P8 billion via the sale of shares to existing shareholders to further solidify its capital adequacy and financial strength.

PSBank sold 142.86 million shares to existing shareholders at P56 per share. The bank has lined up several fund raising activities to further boost its consumer banking business.

It has announced plans to issue medium-term fixed or floating rate notes worth as much as P10 billion to access medium-term and stable funding as it further expands its consumer banking segment.

PSBank has also launched a P20 billion long-term negotiable certificates of time deposits (LTNCD) program where it has so far raised P5.1 billion last August.

Meanwhile, Metrobank earlier announced it is redeeming P16 billion worth of debt note ahead of scheduled maturity.

Metrobank raised P16 billion from the issuance of debt notes in March 2014 in compliance with the Basel III capital framework imposed by the BSP.