RCBC raises $400 million from oversubscribed sustainability notes

MANILA, Philippines —  Rizal Commercial Banking Corp. (RCBC) has raised $400 million from its return to the offshore debt market as investors swarmed its sustainability note issuance.

The Yuchengco-led bank said the final order book was 5.9 times oversubscribed at $2.4 billion, reflecting global investors’ continued confidence in RCBC and its positive outlook on credit.

The orders from more than 164 accounts were well diversified, with 78 percent allocated to asset managers, 13 percent to banks, six percent to official institutions, insurance companies and pension funds, as well as three percent to private banks, security firms and brokers.

The bank issued five-year senior unsecured fixed rate sustainability bonds under its $3 billion medium term note program, with a coupon rate of 5.5 percent per annum.

“The transaction saw strong interest from a wide range of high quality Asian and European investors, which allowed the bank to tighten final price to 165 basis points (from an initial 195 basis points) over the five-year US Treasury yield,” RCBC said.

The notes, with a maturity date of January 2029, will be listed on the Singapore Exchange together with the other two outstanding US dollar-denominated bonds of RCBC.

Australia and New Zealand Banking Group Ltd., Citigroup Global Markets Ltd. and SMBC Nikko Securities (Hong Kong) Ltd. acted as joint bookrunners.

The Yuchengco-led bank said the proceeds from the fund raising activity would be used to support, finance, and refinance RCBC’s loans to customers or to its own operating activities in eligible green and social categories as defined in the bank’s Sustainable Finance Framework.

RCBC’s Sustainable Finance Framework articulates its strategy to prioritize fund raising and lending to priority sectors that have clear environment and social benefits, foremost of which is clean energy.

The framework prescribes an exclusionary criteria, which identify certain projects as ineligible for the use of proceeds from the sustainable financing instruments, in particular fossil fuel power generation.

RCBC president and CEO Eugene Acevedo earlier told The STAR the bank’s commitment to sustainability is grounded in the principles outlined in the United Nations Sustainable Development Goals and the Paris Agreement on Climate Change.

As of October 2023, RCBC has around P35 billion sustainability bonds and green time deposits that are refinancing over 12,000 green and social projects.