ALI raising P6 B from PH's first sustainability-linked bonds

Real estate giant Ayala Land Inc. (ALI) is planning to issue P6 billion worth of Sustainability-linked Bonds, which has been assigned the highest Issue Credit Rating of PRS Aaa by Philippine Rating Services Corporation (PhilRatings).

In a statement, PhilRatings said the proceeds of the proposed bond issuance will be used by ALI for general corporate requirements, including capital expenditures. 


PhilRatings also maintained its Issue Credit Rating of PRS Aaa, with a Stable Outlook, for ALI’s total outstanding bonds amounting to P115.25 billion.
Obligations rated PRS Aaa are of the highest quality with minimal credit risk.

The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. A Stable Outlook means the assigned rating is likely to be maintained in the next 12 months.

PhilRatings identified key considerations in the assignment of the ratings and the corresponding Outlook including ALI’s well-diversified portfolio, complemented by strong brand equity and its experienced and competent management team and synergies with the Ayala Group.

Also factored-in is ALI’s commitment to sustainability, propelled by its planned issuance of the country’s first sustainability-linked bonds; sustained revenue and profit expansion, supported by healthy operating cash flow, and its conservative capital structure with a well-managed debt portfolio.

“The rating assigned to the proposed Sustainability-linked Bonds is mainly in relation to the Company’s capacity to pay the rated bonds and is not an opinion on the attainability or capability to achieve the sustainability targets linked with the bonds,” noted PhilRatings.


Ayala Land's Arca South estate

The company said it is set to hit another major milestone in its sustainability journey with its proposed issuance of the KPI-based Sustainability-Linked Bonds amounting to P6.0 billion.

“PhilRatings notes that, based on available data from AsianBondsOnline, the foregoing will be the first of its kind in the country,” the ratings agency said.

The structural and financial characteristics of the bond are tied to two predefined sustainability objectives: reduce the operational Scopes 1, 2, and 3 greenhouse gas (GHG) emissions of ALI’s commercial properties by 42 percent by 2030, from a baseline date of 2021 – measurement date of 2031, and obtain EDGE Zero Carbon certification for 1.5 million sqm of office commercial properties by 2025 – measurement date of 2026. 

In line with the first sustainability objective, ALI has offset 86 percent of its scopes 1 and 2 emissions by the close of 2023, a milestone independently verified by a third-party assessor Carbon Check India. 

Regarding the second sustainability objective, 354,000 sqm (eight buildings) or 23.6 percent have been EDGE Zero Carbon- certified as of April 18, 2024, according to the Company.