RCBC sustainability bond marks new milestone

RCBC upsized the sustainability peso bond due to considerable investor demand, with the proceeds mainly directed towards green-minded loans for customers or its own activities

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Philippine lender Rizal Commercial Banking Corporation (RCBC) on June 4 announced the completion of the issuance of its Asean sustainability bond amounting to eight billion pesos (US$154 million), marking a new milestone in the Philippine domestic debt capital markets.

The bonds, due in 2021, pay a coupon of 6.15% and represent the first Asean sustainability bond in the Philippines. The offering was upsized from the original amount of five billion pesos on the back of strong demand from retail investors.

The parameters in the use of proceeds for the sustainability bonds influence RCBC’s funds/asset allocation decisions towards projects with social and/or environmental impact. The bonds are issued under RCBC’s sustainable finance framework, which explains the bank’s strategy to use sustainable finance to fund loans and projects that have clear environmental and/or social benefits.

The bank will use the proceeds to finance or refinance its loans to customers or its own operating activities in renewable energy, green buildings, clean transportation, energy efficiency, pollution prevention and control, sustainable water management, affordable basic infrastructure, affordable housing and essential services such as healthcare, among others.

Sustainalytics, a leading independent ESG (environmental, social and governance) research and ratings provider, has provided a second party opinion on RCBC’s sustainable finance framework and has concluded that the eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles 2018, the Social Bond Principles 2018, the Sustainability Bond Guidelines 2018 and the Asean Sustainability Bond Standards.

The Philippine Securities and Exchange Commission also confirmed that the issuance qualifies as an Asean sustainability bond transaction.

ING Bank acted as the sole sustainability structuring adviser, and sole arranger and bookrunner for the transaction.

Earlier this year in January, RCBC priced the first peso Asean green bond with an issue size of 15 billion pesos with a tenor of 1.5 years and a coupon of 6.7315% per annum. The deal garnered a robust demand from the institutional investors, as demonstrated by the books being more than 3x oversubscribed from its announced issue size of five billion pesos, allowing RCBC to print a 15-billion-peso offering. Proceeds from the issue will be used to support the bank’s expansion and initiatives in the green space.

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Date

7 Jun 2019

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