BPI Reassesses Timing of Planned Blue Bond Issuance Amid Market Volatility
Key Takeaways
- •BPI is reassessing a planned blue bond issuance because of continued market volatility.
- •Chief Financial Officer Eric M. Luchangco said the offering is more likely to happen next year, but no final decision has been made.
- •The bank may still issue peso-denominated bonds before year-end and could refinance its P40-billion SINAG bonds due in December.
- •BPI has about P50 billion in water-related assets and investments that could fit its blue bond framework.
- •BPI’s first-half net income fell 0.4% year on year to P32.8 billion.
Bank of the Philippine Islands (BPI), one of the country's largest commercial banks, is reassessing the timing of a blue bond issuance it had previously planned for this year, citing continued volatility in market conditions.
"We're open, but no firm schedule at this time. It's probably more likely next year than this, but that's not a firm decision yet," BPI Chief Financial Officer and Chief Sustainability Officer Eric M. Luchangco said in a Viber message.
Speaking last week, Mr. Luchangco indicated that while the bank may still issue peso-denominated bonds before year-end, a blue-themed issuance is not guaranteed.
"There's no concrete plan at this time. I mean, we would still like to do it, but there's no concrete plan. I expect that we will probably be doing something in the local market. But again, it depends on the circumstances," he said.
Blue bonds are a type of sustainable debt instrument specifically earmarked to finance projects related to ocean and water resources. For the Philippines, an archipelagic nation whose economy is deeply tied to coastal and marine resources, such instruments carry particular relevance. Earlier this year, Mr. Luchangco noted that BPI has approximately P50 billion in water-related assets and investments that could be financed under its blue bond framework.
Globally, thematic bond issuance — spanning green, social, sustainability, and sustainability-linked debt — has faced headwinds as elevated interest rates and macroeconomic uncertainty have led some issuers to delay or reassess offering plans.
BPI Treasurer and Global Markets Head Dino R. Gasmen separately stated last week that the bank may still tap the domestic debt market this year to refinance its P40-billion SINAG bonds — short for Supporting Inclusion, Nature, and Growth — which are scheduled to mature in December.
The bank's most recent domestic market issuance was in January, when it raised P50 billion through its two-year SIGLA Bonds, standing for Supporting Individuals Grow, Lead, and Achieve.
BPI reported first-half net income of P32.8 billion, a slight decline of 0.4% year on year, as rising operating expenses and increased loan-loss provisioning offset robust revenue growth from its core businesses.
— Aaron Michael C. Sy
