DBP raising P5-B 1st sustainability bonds

Published October 15, 2019, 12:00 AM

by manilabulletin_admin

By Emmie V. Abadilla

The Development Bank of the Philippines (DBP) is raising P5-billion from the initial tranche of its P50-billion Sustainability Bond Programme to finance priority environmental and social projects.

DBP president and chief executive officer Emmanuel G. Herbosa
DBP president and chief executive officer Emmanuel G. Herbosa

The bank’s two-year bonds – its first sustainability bond issue, carries an interest rate of 4.25% per annum with final pricing targeted to be determined this week, on October 18, 2019, to be followed by an eight-day public offer period, with issue and listing date on November 11, 2019.

Proceeds from the bonds will fund or refinance new and existing green or social assets that contribute to economic inclusion, environmental objectives such as climate change mitigation and adaptation, natural resource conservation, pollution control and prevention, as well as projects that directly address specific social issues, announced DBP President and Chief Executive Officer Emmanuel G. Herbosa.

“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,” he elaborated.

Furthermore, “We are working with the Securities and Exchange Commission to align the bond issuance with ASEAN Sustainability Bonds Standards, given their Sustainability Framework.”

So far, the local market for sustainability bonds is still evolving. DBP will be the first state bank to issue such a bond as well. “The more we come up with this type of bonds, the more take-up there’ll be for them,” noted bank executives “Right now, there’s no difference in the pricing of these bonds. It’s just a matter of preferences.”

Current market conditions have been conducive for capital markets issuances, confirmed Standard Chartered Bank Philippines Chief Executive Officer Lynette V. Ortiz.

Standard Chartered Bank is the Structuring Advisor and Issue Manager for DBP’s P50-billion Sustainability Bond Programme. Together with China Bank Capital, the former is also a Joint Lead Arranger.

“It has been awhile since DBP last tapped the Philippine capital markets and their proposed issuance not just provides for a sound investment for our portfolio managers and retail investors, but also brings another opportunity for direct investing in nation building,” China Bank Capital Corporation President Ryan Martin L. Tapia concluded.