RIZAL COMMERCIAL Banking Corp. (RCBC) is set to issue at least P5 billion in two-year peso-denominated sustainability bonds, the first of its kind in the country, with the proceeds to fund environmental and social projects.

In a disclosure to the local bourse on Wednesday, the Yuchengco-led lender announced it will offer a Peso ASEAN Sustainability Bond amounting to P5 billion, with an option to upsize.

The sustainability bonds carry a coupon of 6.15% per annum, and will be offered to the public from May 14 to 28, unless adjusted by the bank. They will be listed on the Philippine Dealing & Exchange Corp. on or around June 4.

“The bank is proud to pioneer another first in the Philippine capital markers after its issuance of green bonds earlier this year,” RCBC Senior Executive Vice- President and Treasurer Horacio E. Cebrero III was quoted as saying in the disclosure.

The fund-raising activity comes after RCBC announced last week the establishment of its Sustainable Finance Network, which serves as a guideline for sustainable financing instruments to fund loans and projects that have environmental and social benefits.

This will be the first debt note in the country to be issued under the Association of Southeast Asian Nations (ASEAN) Sustainability Bond Standards 2018.

“Proceeds from the ASEAN Sustainability Bond will go towards strengthening RCBC’s commitment to the sustainable initiatives of its customers,” Mr. Cebrero added.

In particular, the bank will use the bonds’ proceeds to fund the following projects: renewable energy, green buildings, clean transportation, energy efficiency, pollution prevention and control, sustainable water management, environmentally sustainable management of living natural resources and land use, affordable basic infrastructure, access to essential services, employment generation, affordable housing and socioeconomic advancement and empowerment.

“The bonds provide investors with a means to channel their investible funds towards projects with positive environmental and social impacts,” RCBC said.

The bank mandated ING Bank N.V.-Manila branch as the sole arrange for the issuance and sustainable structuring adviser for its sustainable finance framework.

In January, it raised P15 billion worth of 1.5-year green bonds under its green finance framework. Proceeds will be used to support RCBC’s expansion and initiatives in the green space.

The bank added that the sustainable bonds to be raised this month are in support of the Securities and Exchange Commission’s (SEC) thrust to develop the sustainable financing in the domestic market.

The SEC approved the guidelines for the issuance of social and sustainability bonds late last month under the ASEAN Social Bond Standards.

RCBC posted a P1.3-billion net income in the first quarter, up 15% from P1.1 billion booked in the same period in 2018.

Shares in RCBC closed unchanged at P26.20 apiece yesterday. — Karl Angelo N. Vidal