Philippine lender Rizal Commercial Banking Corporation (RCBC) will be pioneering the issuance of a peso Asean sustainability bond under its recently-established sustainability finance framework.
The planned issuance, announced on May 15, will also be the first sustainability bond from the Philippines issued under the Asean Sustainability Bond Standards 2018. The bonds will also be aligned with the International Capital Markets Association’s sustainability bond guidelines 2018.
The target offering size is 5 billion pesos (US$95.25 million) with an option for oversubscription. RCBC has set the coupon at 6.15% per annum with a tenor of two years. The public offer period commenced on May 14 and will be opened until May 28, unless such date is adjusted by RCBC in its sole discretion.
RCBC will use the bond proceeds in accordance with the green and social eligible categories, including renewable energy, green buildings, green transportation, energy efficiency, pollution prevention and control, and sustainable water management.
Other eligible categories are environmentally sustainable management of living natural resources and land use, affordable basic infrastructure, access to essential services, employment generation, affordable housing, and socio-economic advancement and empowerment.
The bonds, RCBC says, provide investors with a means to channel their investible funds towards projects with positive environmental and social impacts. The bank intends to report the allocation of the net proceeds to the eligible green and social portfolio. Wherever possible, RCBC may report on the aggregated impact of the eligible green and social portfolio on a categorical level. This will enable investors to see the positive impact of RCBC’s financing activities.
This planned issuance also supports the thrust of the Philippine Securities and Exchange Commission's desire to further develop sustainable financing in the local market, following its approval of the guidelines on the issuance of social and sustainability bonds under the Asean standards.
RCBC has mandated ING Bank as the sole arranger for the issuance and sustainable structuring adviser for the bank’s sustainable finance framework.
RCBC’s sustainable finance framework demonstrates the bank’s strategy to deploy sustainable financing instruments to fund loans and its own projects that have clear environmental and/or social benefits.
Sustainalytics provided the second party opinion on RCBC’s sustainable finance framework. It considers that the eligible green and social projects as well as lending activities as defined in the framework will contribute to the decreasing environmental footprint of the Philippines, advancing employment generation and improving access to essential services for vulnerable groups in the country.