RCBC raises P17.8 billion via ASEAN sustainability bonds

MANILA, Philippines — Yuchengco-led Rizal Commercial Banking Corp. (RCBC) raised P17.87 billion as it returned to the domestic debt market through the issuance of ASEAN sustainability peso bonds.

RCBC treasurer Horacio Cebrero said the listed bank’s sixth foray into the peso bond market was met with strong demand as its order book was almost six times oversubscribed from an initial size of P3 billion.

Proceeds from the issuance of 2.5 and 5.2 year fixed-rate bonds will be used to support asset growth, refinance maturing liabilities, as well as other general funding purposes.

The amount will also bankroll eligible loans defined under the bank’s Sustainable Finance Framework that has been certified by leading independent environmental, social and governance (ESG) research and rating provider Sustainalytics.

This is the third time RCBC is issuing green or sustainability bonds. The 2.5-year tenor has a fixed coupon of 3.2 percent, while the 5.25-year tenor, which carries a 4.18 percent rate, will be listed on the Philippine Dealing and Exchange Corp. (PDEx) on March 31.

The bank has raised more than half of the total amount, including P15 billion through the issuance of ASEAN green bonds in February 2019 and another P8 billion via ASEAN sustainability bonds in June 2019.

RCBC also raised P7.5 billion in November 2019, P7.05 billion in March and P16.6 billion in July last year.

Despite the challenges brought about by the pandemic, RCBC remains committed to restoring normalization in the capital markets and support business activity.

“We still have room in our P100 billion program which may accommodate another issuance,” Cebrero told The STAR.

Earnings of the Yuchengco-led bank slipped by 6.9 percent to P5.02 billion in 2020 from P5.39 billion in 2019 as provision for impairment losses jumped by 26 percent to P9.33 billion from P7.4 billion due to uncertainties brought about by the global health pandemic.

For 2021, RCBC intends to maintain high provisioning, but not as high as that of last year, bringing it down to about 1.5 percent of total loans compared to last year’s two percent.