RCBC raises $300M via sale of ‘sustainability’ bonds

Yuchengco-led Rizal Commercial Banking Corp. (RCBC) has raised $300 million from the sale of five-year US dollar-denominated debt paper, raising the curtain for the bank’s “sustainable finance” framework.

The “sustainability” notes will be drawn down from the bank’s $2-billion medium-term note program and issued at 99.751 with a coupon rate of 3 percent a year.

The bonds were priced at a spread of 170-175 basis points over the comparative five-year US treasuries, tighter from the guidance of a 195-basis point spread.

“We are very happy about the global market’s reception of our sustainability bonds, the first of such bond out of the Philippines,” said RCBC senior executive vice president and treasurer Horacio Cebrero III.

“We are pleased with the investor diversification that was achieved in this offering. RCBC is extremely proud of the interest this issuance received from SRI (socially responsible investment) investors, further strengthening our resolve to promote sustainable practices and support our clients’ sustainability goals.”

The final order book was oversubscribed by five times the base offer, with orders taken from more than 100 accounts.

About 74 percent of the issuance was allocated to asset managers and fund managers, 18 percent to bank treasury and insurance, and 8 percent to corporations, private banks and other investors.

The offshore notes will be listed on the Singapore Exchange Securities Trading Ltd., similar to RCBC’s three outstanding US dollar-denominated bonds.

Proceeds from this offering will support and finance or refinance RCBC’s loans to customers or its own activities in eligible green and social categories as defined by its sustainable finance framework. These could include loan disbursement for renewable energy, green buildings, clean transportation, energy efficiency, pollution prevention and control, sustainable water management, affordable basic infrastructure, affordable housing and essential services like health care.

BofA Merrill Lynch, Citigroup Global Markets Ltd., ING and SMBC Nikko Capital Markets Ltd. are the joint bookrunners, while ING was the sole sustainability bond structurer.