Bank of the Philippine Islands raises ₱21.5bn from pioneering CARE Bonds

MAKATI CITY: Bank of the Philippine Islands (BPI) has exceeded initial   targets   for its  pioneering  COVID  Action  Response  Bonds  (CARE   Bonds),  as subscriptions for the offering reached ₱21.5 billion, more than seven (7) times the initial planned issue size of ₱3 billion,  triggering  an  expedited  offer  period  closing for the  country’s  first COVID response bonds.

The  CARE  Bonds,  which  have  been  issued  and  listed  today  at  the Philippine  Dealing  & Exchange Corp., have a tenor of 1.75 years and an interest rate of 3.05% p.a., paid quarterly in arrear. Proceeds of the CARE Bonds will be used by the Bank to finance and refinance eligible Micro, Small and Medium Enterprises (MSMEs), one of the sectors hardest hit by COVID-19, under BPI’s Sustainable Funding Framework.

“We issued the CARE Bonds to address the financing needs of MSMEs, as they work to overcome the challenges brought about by COVID-19. The amount raised adds to our capability to provide financing to this very important segment of the economy,” said BPI President and CEO Cezar P. Consing.

The  overwhelming  reception  of  investors  to  the  CARE  Bonds highlights  the  potential  of  the social bond market, which the Securities and Exchange Commission (SEC) has put forward as a funding source for projects to address the devastating impact of the global health crisis. Last month, the SEC encouraged issuers to explore the social bond market to help the country recover from the pandemic, and confirmed that the BPI CARE Bonds qualify as Social Bonds under the ASEAN Social Bonds Standards.

BPI Capital Corporation, and The Hongkong and Shanghai Banking Corporation Limited (HSBC) are the Joint Lead Arrangers of the CARE Bonds. BPI Capital is Sole Selling Agent, while HSBC is Participating Selling Agent.