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BPI pioneers Asean green bond issuance

Lawrence Agcaoili (The Philippine Star) - September 5, 2019 - 12:00am

MANILA, Philippines — Ayala-led Bank of the Philippine Islands (BPI) has raised $300 million from the issuance of green bonds, making it the first Philippine bank to issue dollar-denominated ASEAN green bonds.

In a statement, BPI said the fund raising activity, which is part of the bank’s $2 billion medium term note program, was over four times oversubscribed.

“The offering was over four times over-subscribed, with the order book allocated predominantly to Asia, and the rest to Europe,” the bank said.

By investor type, more than half of the offering was allocated to asset managers and fund managers, around one-third to banks, financial institutions and private banks and the remainder to insurance companies, pension funds and other investors.

BPI Capital acted as the sole global coordinator for the transaction, while BPI Capital, Bank of America Merrill Lynch, Citigroup, Credit Suisse, Mizuho Securities and UBS served as joint lead managers and bookrunners.

The senior unsecured fixed rate ASEAN green bonds due September 2024 were priced at 99.641 with a re-offer yield of 2.577 percent. The bonds carry a coupon of 2.5 percent per annum, payable semiannually.

This is the first dollar-denominated ASEAN green bond issued by a Philippine bank.

The fund raising activity also yielded the lowest coupon and yield ever paid for a dollar-denominated bond from the Philippines as well as the lowest credit spread ever paid by a Philippine bank.

BPI said the net proceeds from the bonds would be used for the financing or re-financing of green eligible projects, as further described in BPI’s Green Finance Framework.

BPI established the framework last June highlighting its long-standing commitment to fund projects with clear environmental benefits. It details guidelines for the following with respect to any green bonds or loans to be issued by the bank: evaluation and selection of eligible projects, management of proceeds and reporting.

The framework is aligned with the International Capital Market Association Green Bond Principles, the ASEAN Green Bond Standards, and the Loan Market Association Green Loan Principles.

BPI earlier raised 100 million Swiss francs from its maiden ASEAN Green bond issuance to bankroll green eligible projects. The two-year bonds were priced at 100.040 percent with a re-offer yield of –0.020 percent, the first negative yielding bonds to be issued out of the Philippines in the international capital markets.

BANK OF THE PHILIPPINE ISLANDS
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