In first ever green bond offer, RCBC raises P15B

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) is raising P15 billion from a landmark bond offering touted as the first peso-denominated Association of Southeast Asian Nations (Asean) “green” bonds or those that fund projects with clear environmental benefits.

The debt paper would be due in 1.5 years and priced to yield 6.7315 per annum, RCBC disclosed to the Philippine Stock Exchange on Friday.

The bond will be issued under RCBC’s recently established green finance framework, which is aligned with the Green Bond Principles 2018, the Green Loan Principles 2018, Asean Green Bond Standards 2018 and the International Capital Market Association’s Green Bond Principles 2018.

Green bonds are similar to traditional bonds in terms of deal structure, but they have different requirements for reporting, auditing and proceeds allocations. Based on the Asean rules, the bonds must exclusively fund eligible green projects, including renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of living natural resources and land use, clean transportation, climate change adaptation and green buildings.

To be eligible to issue an Asean green bond, issuers must be incorporated in any of the Asean member countries.  A non-Asean issuer may also issue the same, provided the eligible projects are located in the Asean.

“The bank is grateful for the overwhelming support from its institutional investors, with the books being more than three times oversubscribed from its announced issue size of P5 billion, allowing an issue size of P15 billion,” RCBC senior executive vice president and treasurer Horacio Cebrero III said.

“The proceeds from the issuance will be used to support the bank’s expansion and initiatives in the green space,” Cebrero added.

The public offering will run from Jan. 21 to 25 this year.  The bonds will be listed on the Philippine Dealing & Exchange Corp. around Feb. 1 this year.

RCBC has mandated HSBC and ING to arrange the issuance.  ING was tapped as the sole green structuring advisor for RCBC’s green finance framework.