DUTCH firm ING Bank N.V. (ING Bank) has arranged the first 10-year local currency green bond issuance from Southeast Asia, denominated in Philippine peso, in line with “helping clients focused on solving today’s environmental challenges.”
The landmark deal amounting to P1.06 billion will support the renewable projects in the Philippines of Singapore-based Sindicatum Renewable Energy Co. Pte. Ltd. (Sindicatum Renewables), a regional developer and operator of clean energy projects.
ING Bank said that the transaction is innovative as the synthetic local currency issue in Philippine peso is settled in US dollars, “with the structure allowing the issuer to have greater US dollar liquidity and to achieve 10-year funding at a more competitive pricing level.”
“We are delighted to have successfully completed this landmark Philippine peso-denominated green bond. This transaction was very well received by the market and attracted high quality, long-term investors, allowing us to extend the maturity profile of our debt,” Sindicatum Renewables CEO Assaad W. Razzouk was quoted in a statement as saying. “We can now expand further our renewable-energy footprint in the Philippines where we intend to rapidly build a portfolio of 250 MW [megawatt] of solar and wind assets.”
The bond is credit guaranteed by GuarantCo helping it to achieve issue ratings of “A1” by Moody’s.
ING Bank served as the sole lead manager, sole book-runner, and sole green structuring advisor for the 10-year green bond amounting to P1.06 billion. This was the second green bond issuance that ING Bank arranged for Sindicatum Renewables, following its international green bond debut denominated in Indian rupee for an aggregate amount of INR 2.5 billion in January 2018.
“We are proud to have closed our second deal with Sindicatum Renewables, following the successful $40 million first international corporate Indian Rupee Green Bond in Asia earlier this year. The latest transaction will support green field projects in the Philippines. GuarantCo’s credit guarantee was instrumental in generating interest and ultimately investment commitment and confidence from top life-insurance companies in the Philippines,” Lasitha Perera, CEO of GuarantCo, said.
In the last two years ING Bank has assisted numerous green bond issuances for Asian financial institutions and corporates. This includes the $500-million green bond debut by DBS Bank in July 2017, the €1-billion green bond issued by the China Development Bank in November last year and the two green bonds with a total value of approximately $60 million for Sindicatum Renewables.
“We see growing interest by clients in sustainable finance. This deal demonstrates our capabilities to attract long-term sustainability-focused investors in the local market. Being one of the frontrunners in this arena, ING is well-placed to support corporates in the Philippines committed to becoming more sustainable,” ING Bank NV Philippines Country Manager Hans B. Sicat was quoted in the samestatement as saying.
In May this year ING Bank’s senior economist Jose Mario I. Cuyegkeng said having performed well in the first quarter, the Philippine economy should do even better in the months ahead and in the coming year.
Cuyegkeng said expectations of a more moderate inflation in 2019, for instance, as well as the impact of spending related to next year’s midterm elections, should help spur greater household spending.
For this year, he projects growth averaging 6.8 percent and even better growth of 6.9 percent in 2019.