Universal bank Rizal Commercial Banking Corp., or RCBC, successfully priced $400 million in five-year bonds that marked its return to the US debt market.

The loan was part of the bank’s $3-billion medium-term note program. The bonds will be issued with a coupon of 5.5 percent a year and a maturity date of 18 January 2029. It will be issued under the Sustainable Finance Framework of RCBC.

The debt papers were issued in denominations of $200,000 and increments of $1,000 thereafter, will settle on 17 January 2024. The notes will be listed on the Singapore Exchange, or SGX, similar to the Bank’s other two outstanding dollar-denominated bonds.

Capitalizing on a conducive market, RCBC announced a mandate for a potential Sustainability Bond transaction on 8 January 2024 and conducted a series of fixed-income investor calls throughout the day.

The instrument has a spread of 195 basis points, or bps, over the 5-year US Treasury yield. The transaction saw strong interest from a wide range of topnotch Asian and European investors, which allowed the bank to tighten the final price guidance to 165 bps.

Float oversubscribed

“It is worth noting that the final orderbook was 5.9x oversubscribed at $2.3 billion, with orders from more than 164 accounts clearly reflecting global investors’ continued confidence in RCBC and their positive outlook on the credit.

The orderbook was well diversified with 78 percent allocated to asset managers, 13 percent to banks, 6 percent to official institutions, insurance companies, pension funds and 3 percent to private banks, security firm and brokers.

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 2018, the Social Bond Principles 2018 and the Sustainability Bond Guidelines 2018, administered by the International Capital Markets Association and the ASEAN Green Bond Standards, the ASEAN Capital Markets Forum.