The Philippines’ largest bank, BDO Unibank, will be issuing a peso-denominated, fixed-rate sustainability bond with a minimum aggregate issue size of 5 billion pesos (US$100.40 million) to diversify its funding sources. In a disclosure to the Philippine Stock Exchange on December 20, the bank says the proceeds will also be used to finance and/or refinance eligible assets as defined in its sustainable finance framework.
This is the first time that BDO will be issuing a peso-denominated sustainability bond to both institutional and retail investors. The bank had previously issued a US$150 million green bond in 2017, with the International Finance Corporation (IFC) as the sole investor, which represented the first green bond issued by a Philippine commercial bank. The proceeds were used exclusively to finance climate-smart projects, including renewable energy, green buildings and energy-efficient equipment.
The Philippines’ Securities and Exchange Commission (SEC) has confirmed the qualification of the sustainability bond offering as an Asean sustainability bond, having complied with the requirements under the Asean Sustainability Bond Standards and the SEC Asean Sustainability Bond Circular.
The proposed issuance, to be drawn under BDO’s 365 billion pesos bond programme, has an indicative tenor of two years and a minimum investment amount of 500,000 pesos with additional increments of 100,000 pesos thereafter. The offer period will be from January 10 to 21 2022, while the issue, settlement and listing date will be on January 28 2022.
Standard Chartered is the sole arranger of the issuance, as well as a selling agent along with BDO and BDO Private Bank. BDO Capital & Investment Corporation is acting as the financial adviser for the deal.
Under BDO’s sustainable finance framework, the net proceeds of green/sustainability bond will be allocated to finance or refinance eight eligible green and social projects based on the ICMA Green Bond Principles; Asean Green Bond Standards; LMA, APLMA Green Loan Principles; ICMA Social Bond Principles; ICMA Sustainability Bond Principles; and Asean Green, Social, Sustainability Bond Standards.
Eligible green projects require environmental benefits such as a reduced carbon footprint and vulnerability of communities to climate change. Eligible social projects require positive social outcome for the impoverished, excluded, marginalized, vulnerable, disabled, undereducated, underserved and unemployed population.
All designated green and social projects shall provide clear environmental and social benefits, which will be assessed and quantified by BDO.