Philippine lender Rizal Commercial Banking Corporation ( RCBC ) returned to the US dollar bond market on January 21 when it printed a US$350 million sustainability bond in a demonstration of its commitment towards building a climate-resilient and low-carbon loan portfolio.

The five-year, one-day senior unsecured bonds were priced at 99.279% with a coupon of 5.375% – equivalent to a spread of 115 basis points ( bp ) over US treasuries. This was 30bp tighter than the initial price range in the 145bp area. The proceeds will be used to support and finance and/or refinance RCBC’s loans to customers or its own operating activities in eligible green and social categories as defined in the bank’s sustainable finance framework.

The bank announced the mandate for a potential US dollar sustainability bond transaction on January 20 and conducted a series of fixed income investor calls throughout the day. Following one day of collecting investor feedback, the bank released the terms and initial price guidance, which was in the 145bp area over US treasuries.

The transaction saw a strong interest from a wide range of investors, which allowed the bank to tighten the final price guidance and eventually priced the deal at a spread of 115bp over US treasuries. This is the tightest pricing spread achieved among the RCBC’s US dollar senior unsecured issuances.

The deal generated a robust investor momentum throughout the day with the final order book amounting to over US$1 billion from 77 accounts. By type of investors, asset managers accounted for 57% of the bonds, banks 38%, and insurance companies and private banks 5%.

The bond offering was drawn under RCBC’s US$4 billion medium-term note programme. ING Bank ( Singapore ), Morgan Stanley and SMBC Nikko Securities ( Hong Kong ) acted as the joint bookrunners and lead managers for the transaction.

RCBC previously tapped the US dollar bond market with a similar sustainability label in January 2024, amounting to US$400 million with the same maturity of five-years and one day. The issuance was priced at 99.543% to offer a yield of 5.606%, representing a spread of 165bp over US treasuries.