BDO Targets PHP 5B In Latest Sustainability Bond Issuance

BDO Unibank, Inc. has issued its third peso-denominated sustainability bond.

The fixed rate sustainability bond has a minimum aggregate issue size of PHP 5 billion. The issuance will have a tenor of one-and-a-half years and a coupon rate of 6.325% per annum. The minimum investment amount is PHP 500,000, with additional increments of PHP 100,000. The offer period will run until July 19, 2024, while the issue, settlement, and listing date will be on July 24, 2024.

Update: BDO said in a recent statement it has closed the offer period early, on July 16, due to “strong demand from both retail and institutional investors.”

The bond is the bank’s third sustainability bond after a PHP 52.7 billion issue in January 2022 and a PHP 63.3 billion issue in January 2024, BDO said in a statement. 

The most recent sustainability bond issuance in January exceeded the original offer of PHP 5 billion by more than twelve times. “The issuance was backed by strong demand from retail and institutional investors, with a rapid build-up in orders resulting in the shortening of the offer period by a week to January 16, 2024,” BDO earlier said, adding that it marked the bank’s largest single issuance.

According to BDO, the Securities and Exchange Commission (SEC) has confirmed that the proposed issuance complies with the requirements set forth under the ASEAN Sustainability Bond Standards and the SEC ASEAN Sustainability Bond Circular. 

The net proceeds of the proposed issuance will be used to finance and/or refinance eligible assets as defined in BDO’s Sustainable Finance Framework and diversify the bank’s funding sources, it said.

The bank also noted that it reserves the right to amend the terms and the timing of the issuance as it deems necessary. 

What are Sustainability Bonds?

According to the ASEAN Capital Markets Forum, sustainability bonds are issues where proceeds are used to finance or refinance a combination of green and social projects or activities that respectively offer environmental and social benefits.

Green bond issuance eligible categories include renewable energy, energy efficiency, clean transportation, green buildings, wastewater management, and climate change adaptation. Examples of social bond issuance eligible categories include food security and sustainable food systems, socioeconomic advancement, affordable housing, access to essential services, and affordable basic infrastructure. 

ING Bank N.V., Manila Branch (ING) is the sole arranger of the proposed issuance, with BDO Unibank, Inc. and ING as selling agents and BDO Capital & Investment Corporation as the financial advisor.