Dutch financial giant ING Bank N.V. has arranged a pioneering P1.06-billion “green” bond issuance by Singapore-based Sindicatum Renewable Energy Company Pte. Ltd. (Sindicatum Renewables), a regional developer and owner and operator of “clean” energy projects.
Proceeds from the issuance of this 10-year peso-denominated “green” bond—the first out of Southeast Asia—will support the renewable projects of Sindicatum Renewables in the Philippines. Green bonds refer to securities that raise funds for projects with clear environmental benefits.
This transaction is seen as “innovative”, given that it is a “synthetic” local currency issue in Philippine peso but settled in US dollars. Such a structure allows the issuer to have greater US dollar liquidity and to achieve 10-year funding at a more competitive pricing level.
The bond is credit guaranteed by GuarantCo, an international development finance institution headquartered in London. This guarantee allowed this issuance to achieve issue ratings of “A1” by Moody’s.
ING Bank served as the sole lead manager, bookrunner, and green structuring advisor for the deal. This was the second “green” bond issuance that ING Bank arranged and managed for Sindicatum Renewables, following its international green bond debut denominated in Indian rupee for an aggregate amount of INR 2.5 billion in January 2018.
“We are delighted to have successfully completed this landmark Philippine peso-denominated green bond,” said Assaad Razzouk, chief executive officer of Sindicatum Renewables. “This transaction was very well received by the market and attracted high quality, long-term investors, allowing us to extend the maturity profile of our debt. We can now expand further our renewable energy footprint in the Philippines where we intend to rapidly build a portfolio of 250 megawatts of solar and wind assets.”
Hans Sicat, country manager of ING Bank in Manila, said the Philippines had ambitious targets to achieve energy efficiency in the coming years. The deal is seen to help the country achieve this goal.
“We see growing interest by clients in sustainable finance. This deal demonstrates our capabilities to attract long-term sustainability-focused investors in the local market. Being one of the frontrunners in this arena, ING is well-placed to support corporates in the Philippines committed to becoming more sustainable,” he said.
Lasitha Perera, CEO of GuarantCo, said: “We are proud to have closed our second deal with Sindicatum Renewables, following the successful $40 million first international corporate Indian rupee green bond in Asia earlier this year. The latest transaction will support green field projects in the Philippines. GuarantCo’s credit guarantee was instrumental in generating interest and ultimately investment commitment and confidence from top life insurance companies in the Philippines.”
The Philippine peso green bond was issued in accordance with both the International Capital Market Association’s Green Bond Principles 2017 and the Asean (Association of Southeast Asian Nations) Green Bond Standards. This means the borrower must apply the loan to fund specific green projects, preserving the market integrity of the green bonds to fund sustainable, environmental projects.