BDO Unibank Inc., the country’s largest lender, will open on Wednesday a nearly two-week public offer of P5 billion in fixed-rate ASEAN Sustainability Bonds, with room to upsize should investor demand prove strong.
The three-year bonds, due in 2029, will have their interest rate set on Tuesday at a spread of 10 to 20 basis points over the prevailing three-year Bloomberg Valuation Service (BVal) rate. As of January 2, the three-year peso BVal stood at 5.5117 percent, providing a benchmark for pricing as market participants weigh yield expectations.
The bonds are scheduled for issuance on January 26. Interest income will be subject to a 20 percent withholding tax, along with a 10 percent service fee, in line with prevailing regulations.
Proceeds from the offer will be used to support BDO’s lending activities, diversify its funding sources, and fund or refinance eligible assets under the bank’s Sustainable Finance Framework. These assets typically include projects and loans that meet environmental and social sustainability criteria, aligning the transaction with the ASEAN Sustainability Bond standards.
The issuance comes as banks continue to tap the capital markets to secure medium-term funding amid steady loan demand and growing investor interest in sustainability-linked instruments. For BDO, the offer reinforces its dominant presence in the domestic bond market while signaling sustained commitment to sustainable finance.
Market watchers see the deal as a test of investor appetite for longer-dated peso bonds early in the year, particularly those carrying ESG credentials. If demand proves robust, the potential upsizing could further highlight the depth of the local market for sustainability-themed issuances.
