RCBC raising $4B from fresh bond foray

Rizal Commercial Banking Corp. (RCBC) will tap the overseas debt market next week and raise up to $4 billion to support sustainability-related initiatives.

In a disclosure to the stock exchange on Tuesday, the Yuchengco-led bank said its unsecured Regulation S sustainability notes would be issued on Jan. 28 via a drawdown on its medium-term note (MTN) program.

This means that the funds will be available gradually, instead of RCBC receiving the full amount all at once.

The bonds will have a tenor of five years and one day, with pricing set during European trading hours on Tuesday. The notes would be listed on the Singapore Exchange Securities Trading Ltd., RCBC said.

READ: Higher expenses pull down RCBC earnings

This type of debt security is not backed by collaterals, meaning investors cannot claim assets if the issuing company defaults on the loan. As a result, these often carry higher interest rates due to increased risk for investors.

Meanwhile, Regulation S notes refer to debt securities offered and sold outside the United States.

“The net proceeds from the issue of the notes will be applied by RCBC to support and finance and/or refinance RCBC’s loans to customers or its own operating activities in eligible green and social categories as defined in RCBC’s Sustainable Finance Framework,” the bank said in its disclosure.

Under the framework, so-called green bonds must fund loans and projects that “have clear environmental and/or social benefits,” including renewable energy power plants, hybrid vehicles and sustainable agriculture.

RCBC tapped ING Bank NV Singapore Branch, Morgan Stanley & Co. International Plc and SMBC Nikko Securities (Hong Kong) Ltd. as joint bookrunners for the issuance.

RCBC’s net income in the first nine months of 2024 dropped by 31 percent to P6.2 billion due to higher costs. INQ