Ayala Land raises P8 billion from sustainability bonds

MANILA, Philippines — Property giant Ayala Land Inc. (ALI) is gearing up to tap more sustainability-linked financing in the coming years following the success of its pioneering initiative which has enabled the company to raise a total of P28 billion so far this year.

ALI raised P8 billion from the second tranche of its sustainability-linked bonds due 2034, which were listed at the Philippine Dealing and Exchange Corp. (PDEx) yesterday.

Proceeds will be used by the company mainly to finance its buyout of the Aboitiz Group’s stake in their joint venture in Cebu as well as for the company’s residential projects.

Last July, ALI successfully raised P20.5 billion through its pioneering sustainability-linked financing program, which included a P6 billion sustainability-linked bond and a P14.5 billion sustainability-linked loan from the International Finance Corp. (IFC).

“Just a few days short of four months, we gather again to list and celebrate this follow-on 10-year P8 billion sustainability-linked bond tranche, bringing ALI’s sustainability-linked financing program to P28 billion with an average tenor of nine years,” ALI president and CEO Anna Ma. Margarita Bautista-Dy said.

“The success of this sustainability-linked financing program, novel as it may be in the country, brings us to the conclusion that the Philippine investing community truly realizes that sustainable finance is integral to the urgent pursuit of sustainability,” she said.

ALI’s P6 billion issuance in July was the first of its kind offered to the public in the Philippines.

The sustainability-linked loan provided by IFC, meanwhile, was ALI’s first loan from a multilateral agency and IFC’s first sustainability-linked loan for a Philippine corporate.

“We recognize that these are but baby steps in our journey to net zero and the road ahead will not be easy. Though I assert that there is nothing that shows commitment and accountability like this P28 billion sustainability-financing program, where our interest rate is pegged on the accomplishment of our sustainability performance targets. In short, we are putting our money where our mouth is,” Bautista-Dy said.

“Going forward, we foresee that this sustainability-linked financing format shall be our template for our fundraising requirements,” she said.

ALI vice president and head of corporate finance Jose Eduardo Quimpo II said that sustainability-linked bonds would definitely be a part of the company’s regular funding program moving forward.

“Next year, definitely this is one of the items we are looking at in our toolkit. It is already established. It has the track record so it’s something that we can do. We do have other avenues to raise capital, but capital markets have been good to us,” he said.

For this year, however, Quimpo said that the P8 billion sustainability-linked bonds would likely be its final bond offering for the year.