BPI to raise P5B via ‘green’ bonds
MANILA, Philippines – Bank of the Philippine Islands (BPI) plans to raise P5 billion from the debt market next month to fund sustainability-related projects as the central bank continues its monetary policy easing cycle.
The Ayala-led bank disclosed on Monday that the offer represented the inaugural tranche of its P200-billion bond and commercial paper program approved in October 2024.
According to BPI, the fixed-rate notes, also called Supporting Inclusion, Nature and Growth bonds, will have a tenor of one and a half years. These will be offered on May 20 to 30 and listed on the Philippine Dealing and Exchange Corp. on June 10.
READ: Record-high deal: BPI raises $800M from offshore bond market
A minimum principal investment of P500,000 is required, with an option to add in increments of P100,000.
BPI has yet to disclose the interest rate, although it has an option to upsize the base offer.
Based on the bank’s sustainability funding framework, the proceeds of the offer must only be used to support sustainability-related projects, such as renewable energy power plants and clean water and sanitation. Unused proceeds cannot be set aside for other purposes.
BPI Capital Corp. and Standard Chartered Bank were tapped as the joint lead arrangers and selling agents for the offer.
The offering will come at a time when the debt market is becoming more attractive, especially after the Bangko Sentral ng Pilipinas cut the benchmark rate for overnight borrowing.
This often drives investors toward fixed-income securities as these typically offer “above-market” rates, resulting in higher yield.
Last August, BPI raised P33.7 billion from its largest thematic bond offer to date as high demand for sustainability-linked debt allowed it to upsize the issuance by more than 500 percent.
The bonds have a term of 1.5 years and bear an interest rate of 6.2 percent.
BPI treasurer Dino Gasmen earlier pointed out that investors were becoming “more aware” about environment, social and governance issues, leading to higher demand for fundraising activities addressing these.
In the first quarter of the year, strong lending in the consumer and micro, small and medium enterprise segments buoyed the net income of BPI by 9 percent to P16.6 billion.
This represented BPI’s highest first-quarter earnings in history. BPI president Jose Teodoro Limcaoco said they were hoping to exceed their 2024 record-high net income of P62 billion this year, noting that they were “fairly on track” to reach their target.
