IFC invests in Ayala’s social bond issue

The International Finance Corp. (IFC) is investing in a social bond to be issued by Ayala Corp.’s foreign subsidiary that will fund the development of an integrated health ecosystem in the country.

The IFC, a member of the World Bank Group, said on Thursday, Nov. 11, that it invests $100 million in a 10-year social bond of AYC Finance Ltd., a unit of the Philippines' oldest conglomerate.

Proceeds from the bond sale will support Ayala Healthcare Holdings, Inc. (AC Health), a wholly owned subsidiary of Ayala, in refinancing the development of a new cancer hospital, among other projects, IFC said.

Cancer is the third-leading cause of death in the Philippines, where incidence and mortality are expected to grow steadily over the next two-decades.

The social bond—the first ever to be issued in the healthcare sector in the Philippines— is "unconditionally and irrevocably” guaranteed by Ayala Corp.

IFC said the issuance “will support AC Health’s strategy to build an integrated health ecosystem designed to provide quality and affordable healthcare for more Filipinos.”

In a statement, Fernando Zobel De Ayala, Ayala president and chief executive officer said the ongoing pandemic exposed the massive underinvestment in the country’s healthcare system, reinforcing the company’s thesis for entering the sector six years ago.

“The Social Bond supports our strategic priority to scale up AC Health as a new growth platform, underpinned by its commitment to uplift the quality and access to preventive care in the country,” Zobel said.

Meanwhile, Alberto de Larrazabal, Ayala chief finance officer and the bond issuance will support growth for the company’s businesses, which has concrete social contribution, particularly in the healthcare industry.

Social bonds tie the use of proceeds to projects that aim to achieve positive social outcomes in everything from health and education to gender, affordable housing, and food security, offering an avenue for investors to generate returns while supporting the alleviation of social issues.

“Addressing health gaps in the Philippines is a critical challenge that has been amplified by the COVID-19 pandemic,” said Rana Karadsheh Haddad, Regional Industry Director, Manufacturing, Agribusiness and Services, Asia and the Pacific at IFC.