Govt bank sets interest rate for ₧3-billion bonds

Stat e-run Land Bank of the Philippines (Landbank) announced it has set the interest rate of 2.5872-percent for its firstever “Sustainability Bonds” offer to fund environmental and social projects.

During the bank’s virtual investors’ briefing held last October 21, the offer period was initially scheduled from October 26 to November 6, 2020. However, due to the very strong demand and oversubscription, Landbank said it is now closed the offer period earlier on October 26.

Landbank said it is looking to tap and access the capital markets to raise at least P3 billion from the pesodenominated fixed-rate bond offering with a 2-year tenor. Due in 2022, the bonds will be issued in minimum denominations of P50,000 and in multiples of P10,000 thereafter, the bank explained.

Standard Chartered Bank (SCB) is the sole lead arranger and bookrunner, while both Landbank and SCB will be selling agents.

Landbank will utilize the proceeds from the issuance to finance various loan programs that support sustainable projects such as green and social projects.

Landbank said the “Green Projects” include those that contribute to environmental objectives such as climate change mitigation and adaptation, natural resource and biodiversity conservation and pollution prevention and control, among others.

“Social Projects” are ventures that help address a social concern and seen to impact on people’s lives, the bank said. “These include projects for basic infrastructure, food security, essential services, affordable housing, employment generation and food security.”