DBP eyes P5 billion sustainability bonds

MANILA, Philippines — State-run Development Bank of the Philippines (DBP) is planning to raise P5 billion through the issuance of two-year “sustainability” bonds to finance environmental and social projects in the country.

The DBP said this is the first tranche of the three-year P50 billion Sustainability Bond Program.

Offer period will be from Oct. 21 to Oct. 30, while the issuance is targeted to be on Nov. 11. The bonds have an initial pricing guidance of 4.25 percent per annum, with the final pricing targeted on Oct. 18.

According to DBP president and chief executive officer Emmanuel Herbosa, the proceeds of the fund raising activity would fund projects that contribute to economic inclusion, environmental projects and projects that address social issues.

“As a development financing institution, DBP has always been at the forefront of sustainable development and environmental protection. The DBP sustainability bonds issuance affirms our commitment to continue supporting initiatives that have an impact not only on communities, but also on our environment,” Herbosa said.

DBP first vice president and head of Corporate Finance Group Francis Nicolas Chua, in an interview, explained that the projects to be funded under the program must be eligible under the bank’s Sustainability Finance Framework.

 “We have to identify projects in the pipeline so that we can allocate the funds,” Chua said.

He said among the projects eligible for financing under this framework include renewable energy and energy sufficiency projects, as well as other infrastructure, such as schools and hospitals, by the government and the private sector.

Chua said investors have so far been receptive of the DBP’s planned fund raising activity. He said the bank may consider upsizing the issuance depending on its requirements and the demand.

“We can also do a follow up but it depends on the need of the bank because, as mentioned earlier, we have to make sure that the proceeds will be used for the projects,” he said.

Standard Chartered Bank will serve as the structuring advisor and issue manager for the bond offering. The bank, together with China Bank Capital, will also serve as the joint lead arrangers for the establishment of DBP’s P50 billion Sustainability Bond Program.