RCBC’s P3-B ‘green’ bonds offer 6% yield

MANILA, Philippines – Yuchengco-led Rizal Commercial Banking Corp. (RCBC) on Wednesday started its P3-billion bond issuance as it seeks to support more sustainability-related projects.

RCBC said in a disclosure that the debt paper, maturing in two and a half years, would have a rate of 6 percent per year.

The bonds are priced slightly above secondary market rates. As of Wednesday, the current interest rate benchmark based on Philippine Bloomberg Valuation for a bond with a tenor of 2.5 years averaged 5.7915 percent.

READ: Lending gives RCBC profit a 10% boost

RCBC also has the option to upsize the offer, which is part of its P200-billion bond and commercial paper program, in case of high demand.

These will be offered until July 9, with issuance and listing on the Philippine Dealing and Exchange Corp. scheduled on July 17.

According to RCBC, proceeds raised from the offer will be used to fully or partially fund eligible green and social projects under its Sustainable Finance Framework.

Under this, the bank may use the funds to bankroll projects related to renewable energy, green buildings, clean transportation, energy efficiency and pollution prevention and control, among others.

Projects eligible under the social category include those related to health care, education, employment generation and affordable housing.

Second sustainable bond

The issuance represents RCBC’s second sustainability-linked bond offer this year.

In January, the country’s sixth largest bank raised $350 million from an offshore bond program at 5.374 percent per annum. The notes, maturing in five years, are part of RCBC’s $4-billion medium-term note program.

In the first quarter, the bank booked a 10-percent jump in earnings to P2.43 billion on the back of robust consumer lending.

Net interest income surged by 29 percent to P12.3 billion. Consumer loans swelled by 39 percent, owing to higher housing and auto loans, which rose by 24 percent and 45 percent, respectively.