Philippine lender Rizal Commercial Banking Corporation (RCBC) is tapping the domestic bond market with a planned issuance of its second Asean sustainability peso bond.

In a disclosure to the Philippine Stock Exchange on March 12, the bank says the offering will be issued in dual tranches with a minimum amount of 3 billion pesos (US$61.86 million) with an option to upsize the amount of the deal. The bonds were priced on March 11 and will be offered at a fixed interest rate of 3.20% per annum for the 2.5-year tenor and 4.18% per annum for the 5.25-year maturity.

The proceeds will be earmarked to support asset growth and refinance maturing liabilities, other general funding purposes and eligible loans defined in RCBC’s sustainable finance framework – the Philippines’ first sustainable finance framework under the Asean Sustainability Bond Standards.

The framework has been certified by Sustainalytics, a leading independent environmental, social and governance (ESG) research and ratings provider, to ensure that the use of proceeds are aligned with those recognized by the Green Bond Principles 2018, the Social Bond Principles 2018, the Sustainability Bond Guidelines 2018, and the Asean Sustainability Bond Standards. It demonstrates RCBC’s strategy to deploy sustainable financing instruments to fund loans and its own projects that have clear environmental and/or social benefits.

The bond issuances will be the sixth drawdown off RCBC’s 100-billion-peso bond and commercial paper programme. The bank first accessed the local bond market with its 15-billion-peso Asean green bond in February 2019, followed by an 8-billion-peso Asean sustainability bond in June 2019. It tapped the bond market three more times after that, raising a total of 31.15 billion pesos between November 2019 and July 2020.

The 8-billion-peso first Asean sustainability bond carried a fixed interest rate of 6.15% per annum for two years. The deal was upsized from the original target of 5 billion pesos on the back of strong demand from retail investors.

The public offering commenced on March 12 and will be opened until March 19, which may be shortened or extended by the bank in consultation with the sole lead arranger and bookrunner Standard Chartered and the financial adviser RCBC Capital Corporation.