RCBC sustainability bond offer musters $350 million
Rizal Commercial Banking Corp. (RCBC) has secured $350 million in fresh funds through a sustainability bond program which is part of its $4-billion medium-term note program.
The green bonds, which will mature in five years or on Jan. 29, 2030, would be issued in $200,000 denominations and increments of $1,000 on Jan. 28, according to RCBC.
In a stock exchange filing on Wednesday, the Yuchengco-led bank said the latest debt papers priced at 99.279 percent of par value at a yield of 5.375 percent per year.
Demand reached over $1 billion from more than 77 accounts, with the notes ending up 2.9 times oversubscribed.
Moody’s rated the offering Baa3, entailing moderate credit risk.
Although currently lower than the 5.75-percent benchmark rate of banks, the offer is expected to be more attractive to investors as they anticipate further rate cuts by the Bangko Sentral ng Pilipinas.
Net proceeds from the sale will be used to repay existing loans and support eligible green and social projects identified under RCBC’s Sustainable Finance Framework.
These projects include power plant construction, sustainable agriculture and hybrid vehicles.
Asset managers
In terms of investor type, 57 percent were asset managers, 38 percent were banks and 5 percent were insurance companies and private banks.
ING Bank NV Singapore Branch, Morgan Stanley & Co. International Plc and SMBC Nikko Securities (Hong Kong) Ltd. were the joint lead managers and joint bookrunners for the drawdown.
Funds under the $4-billion bond program will be available to RCBC gradually, instead of the bank receiving the full amount all at once.
It is also an unsecured issuance, meaning it will not be backed by collaterals. This type of issuance often carries higher interest rates due to increased risk for investors.
Despite reporting a rise in loan demand, high costs pulled down RCBC’s net income in the first nine months of 2024 by 31 percent to P6.2 billion.
Net interest income expanded by 27.6 percent to P30.93 billion, driven by growth in the consumer segment.
