RIZAL Commercial Banking Corp. (RCBC) will issue dollar-denominated sustainability notes out of its medium-term note (MTN) program, with proceeds to support the bank’s lending business.
In a disclosure to the local bourse on Wednesday, RCBC said it will issue on Sept. 11 five-year unsecured sustainability notes via a drawdown from its $2-billion MTN program.
The bonds will carry a fixed-rate coupon payable semi-annually or every six months. The bank said its initial price guidance for the issuance is at the five-year US Treasury’s rate plus 195 basis points. Final pricing was expected during European trading hours yesterday.
According to Reuters data, the five-year US Treasuries were quoted at 1.338% yesterday.
The five-year notes will be issued under RCBC’s Sustainable Finance Framework.
“The net proceeds from the issue of the notes will be applied by the 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.
Citigroup Global Markets Limited, ING Bank N.V.-Singapore Branch, Merrill Lynch (Singapore) Pte. Ltd. and SMBC Nikko Capital Markets Limited were the bookrunners for the transaction.
The notes will be listed on the Singapore Exchange.
RCBC established its Sustainable Finance Network in May, which serves as a framework for sustainable financing instruments to fund loans and projects that have environmental and social benefits.
In June, RCBC issued P8-billion in two-year Association of Southeast Asian Nations (ASEAN) Sustainability Bonds, the first of its kind in the Philippines under the ASEAN Sustainability Bond Standards 2018. The proceeds of the issue will fund environmental and social projects.
The two-year debt papers carry a coupon of 6.15% per annum to be paid quarterly until May 2021.
RCBC saw strong demand from retail investors, prompting it to upsize the issuance from the P5 billion it initially intended to offer.
The bank mandated ING Bank N.V.-Manila branch as the sole arranger for the issuance and sustainable structuring adviser for its sustainable finance framework.
In January, RCBC also raised P15 billion worth of 1.5-year green bonds under its green finance framework. Proceeds of this issuance will be used to support RCBC’s expansion and initiatives in the green space.
RCBC’s consolidated net income climbed 23% year-on-year to P2.7 billion in the first semester backed by the continued growth of its core businesses.
The bank’s shares closed unchanged at P28 apiece on Wednesday. — BML