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Rizal Commercial Banking Corporation has raised $350 million from the U.S. dollar debt markets via a drawdown under its $4 billion Medium Term Note Program.
In a disclosure to the Philippine Stock Exchange, the bank said it has successfully pricedits five-year Senior Unsecured Fixed Rate Sustainability Bonds.
The Notes, rated Baa3 by Moody's, will be issued at 99.279 with a coupon of 5.375 percent per annum and a maturity date of January 29, 2030. The Notes will be issued under the Sustainable Finance Framework of RCBC.
Issued with denominations of $200,000 and increments of $1,000 thereafter, the Notes will settle on January 28, 2025. These will be listed on the Singapore Exchange Securities Trading Limited, similar to the Bank's other two outstanding USD-denominated bonds.
The Bank announced a mandate for a potential US dollar Sustainability Bond transaction on January 20, 2024, and conducted a series of fixed income investor calls throughout the day.
Following one day of collecting investor feedback post the fixed income investor calls, the Bank released terms and initial price guidance for a new 5-year and 1-day bond on January 21, 2025, at a spread of 145 bps over the 5-year U.S. Treasury yield.
“The transaction saw strong interest from a wide range of high quality Asian and European investors, which allowed the Bank to tighten final price guidance to 115 bps over the 5-year Treasury yield,” RCBC said.
The Notes eventually priced at a spread of 115 bps over the 5-year U.S. Treasury yield, representing price tightening of 30 bps from initial price guidance. This is the tightest pricing spread achieved among RCBC's US dollar senior unsecured issuances.
“Orderbooks saw strong momentum throughout the day, with the final orderbook at over $1 billion and the Notes ending up 2.9 times oversubscribed,” the bank noted.
The Notes saw orders from more than 77 accounts — clearly reflecting global investors' continued confidence in RCBC and its credit.
The orderbook was well diversified with 57 percent allocated to asset managers, 38 percent to banks, and five percebnt to insurance companies and private banks.
The net proceeds from the issue of the Notes will be applied by RCBC to support and finance or refinance RCBC’s loans to customers or its own operating activities in eligible green and social categories as defined in RCBC's Sustainable Finance Framework.
Sustainalytics has provided a second party opinion on RCBC's Sustainable Finance Framework and has concluded that the eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles 2021, the Social Bond Principles 2023 and the Sustainability Bond Guidelines 2021, administered by the International Capital Markets Association and the ASEAN Green Bond Standards, the ASEAN Capital Markets Forum.
