RCBC to tap debt mart with P3-B green bond issue

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) is returning to the local debt market soon to raise at least P3 billion from a new offering of “green” bonds, proceeds from which will fund lending expansion and retire older debt.

In a disclosure to the Philippine Stock Exchange on Friday, RCBC said it was looking to issue these new bonds under a P100-billion bond program approved by its board in July 2019.

This latest issuance will mark the eighth drawdown from this bond shelf, which still has P28 billion unused to date.

The last time that RCBC had drawn from its bond shelf was in March 2021, when it raised about P17.9 billion from the sale of 2.5- and 5.25-year green bonds at 3.2 percent and 4.18 percent per annum, respectively.

The green bonds are in line with the Asean (Association of Southeast Asian Nations) sustainability bond framework. RCBC was the first bank to issue and list the first peso-denominated Asean sustainability bond issued in the Philippines.

These are bonds where the proceeds will be exclusively applied to finance or refinance a combination of both green and social projects that respectively offer environmental and social benefits. It is understood that certain green projects may also have social cobenefits, and that certain social projects may have environmental cobenefits.

“The bank intends to use the proceeds to support asset growth and refinance maturing liabilities, as well as supplement other general funding purposes,” RCBC said.

“The terms and timing of the proposed bond transaction will be determined subject to the bank’s requirements and prevailing market conditions,” it added.

The bank first tapped the local bond market in February 2019, when it raised P15 billion from an Asean green bond issuance, followed by P8-billion Asean sustainability bonds in June and P7.5 billion in November of the same year.

Despite the onset of the coronavirus pandemic in 2020, RCBC also sold P7.05 billion worth of these bonds in March of that year, followed by another P16.6 billion in July 2020.

As the pandemic continues to gnaw on the global economy, RCBC sees the need for Asian banks to step up efforts to address climate change while pushing for sustainable growth. It is one of the few Philippine banks funding sustainable projects, including the use of renewable energy. It is also one of the first major financial institutions in the country to formally announce that it will stop financing coal-fired power projects. INQ