Oversubscribed lender’s sustainability bonds | Tyrone Jasper C. Piad


Rizal Commercial Banking Corp.’s fixed rate bond offering (RCBC), led by Yuchengco, was oversubscribed more than 5.9 times before the transaction closed.

In a statement released on Monday, the listed bank said the order book for its 2.5-year and 5.25-year Asean fixed-rate sustainability bonds had reached 17.87 billion pesos. The offer period ran from March 12 to 19.

The information was well received by the market as shares of RCBC climbed 2.34%, or 40 centavos, to P17.50 each amid the benchmark’s 0.64% drop on Monday. .

The bonds, which have a minimum size of P3 billion, are expected to be listed on the Philippine Dealing and Exchange Corp. March 31.

The bonds bear interest rates of 3.2% per annum for the 2.5-year term and 4.18% per annum for the 5.25-year term.

The proceeds are also used to support the growth of the bank’s assets, to finance the general affairs of the company and to refinance maturing liabilities, in addition to the financing of eligible loans mentioned in its sustainable finance framework.

The Yuchengco-led lender used Standard Chartered Bank (SCB) as the sole lead arranger and bookrunner for the transaction, while RCBC Capital Corp. is the financial advisor. Both SCB and RCBC are the sales agents.

The transaction is the sixth draw of the bank’s 100 billion peso bond and commercial paper program. Previously, RCBC had launched ASEAN Green Bonds of 15 billion pesos in February 2019, ASEAN sustainability bonds of 8 billion pesos in June 2019, bonds of 7.5 billion pesos in November 2019 , and bonds of 7.05 billion pesos in March 2020 and bonds of 16.6 billion pesos in July 2020.

The bank’s sustainable finance framework has been certified by Sustainalytics, an independent provider of environmental, social and governance research and rating.

Earlier, RCBC said it aims to offer an offering of senior notes denominated in benchmark currencies this year, which will be drawn from its medium-term note program.

The offering, which could potentially be launched by the second quarter or beyond, may offer green or sustainable financial instruments.

RCBC posted net profit of 5.018 billion pesos last year, down 7% from 5.388 billion pesos in 2019, as impairment losses jumped 26.1% to 9.33 billion of pesos.

At the end of December 2020, total assets and capitalization stood at 770.8 billion pesos and 101.5 billion pesos, respectively. The capital adequacy ratio and Common Tier 1 capital are currently 16.1% and 12.6%, respectively.

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