BDO Unibank is tapping the capital markets anew with the launch of its sixth ASEAN Sustainability Bond offering, seeking to raise at least P5 billion as the country’s largest lender continues to build on strong investor appetite for sustainable debt instruments.

The peso-denominated fixed-rate sustainability bonds will carry a tenor of 1.5 years and a coupon rate of 6.26 percent per annum, according to the bank. The offer period runs from July 9 to July 21, with issue, settlement and listing scheduled for July 28. Minimum investment amount is P500,000, with additional investments in increments of P100,000.

Second sustainability bond issuance this year

The latest offering marks BDO’s second sustainability bond issuance this year and comes less than six months after the bank successfully raised P100 billion from the market in January, underscoring sustained demand from institutional and retail investors for high-quality fixed-income instruments.

In January, BDO initially launched a sustainability bond issue with a minimum size of P5 billion, but overwhelming investor demand prompted the bank to exercise its oversubscription option and eventually raise P100 billion, making it one of the largest peso bond transactions undertaken by a Philippine bank.

The strong response also led BDO to close the offer period ahead of schedule after investor orders rapidly exceeded the original target, reflecting ample market liquidity and continued confidence in the bank’s credit profile.

Cumulative P386.7 billion via sustainability bonds

With the new issuance, BDO said it has raised a cumulative P386.7 billion through sustainability bonds across six offerings since January 2022, reinforcing its position as one of the country’s most active issuers of sustainable finance instruments.

The Securities and Exchange Commission has confirmed that the proposed issuance complies with the requirements of the ASEAN Sustainability Bond Standards and the regulator’s ASEAN Sustainability Bond Circular, allowing the securities to be marketed as sustainability-linked debt instruments.

BDO said proceeds from the offering will be used to finance and refinance eligible assets under its Sustainable Finance Framework, support lending activities and further diversify the bank’s funding sources.

Broader strategy

The sustainability bond program forms part of the bank’s broader strategy to channel capital toward projects that generate positive environmental and social outcomes while supporting economic growth.

The transaction is being arranged by ING Bank N.V., Manila Branch, which is serving as sole arranger and sustainability coordinator. BDO and ING will act as selling agents, while BDO Capital & Investment Corp. will serve as financial adviser.