Real estate giant Ayala Land Inc. is set to seal a P14-billion sustainability bond deal exclusively with the World Bank’s International Finance Corporation (IFC) on or before Friday, July 19, 2024.
In an interview after the listing of the firm’s P6 billion ASEAN Sustainability bonds at the Philippine Dealing and Exchange Corporation, ALI Chief Finance Officer Augusto D. Bengzon said this would complete the firm’s plan to raise P20 billion from sustainability-linked securities.
“What we're doing is dual markets. First is this capital market side (ASEAN bond offering), or public market, and the other one we're looking to do is on the private loan market side," he said.
“We're hoping to close another first for Ayala Land, say, the next 24 to 48 hours to make this a really comprehensive first-time sustainability-linked offering for us. So watch out for that. I think, on or before Friday, we'll send something out in terms of what we've actually achieved,” he added.
Bengzon said also “IFC is calling it a bond... We're calling it a loan. They’re calling it a bond which they will take down in its entirety but they don’t intend to sell it."
“So, we're looking to package it as a sustainability linked (instrument)... If they classify it as a bond on their side, maybe that's what we submit it to the SEC (Securities and Exchange Commission),” he further noted.
Bengzon said this was a first with IFC. “It's the first time we're actually doing a deal with the IFC... We've been engaging with them every year. But, I guess, this is the first time where we actually came to terms and signed on the dotted line," he added.
He stressed that "I think the big difference is they're quite optimistic about the prospects of the Philippines. And secondly, they're willing to extend financing to us in local currency. In the past, they want to extend it in US dollars, which we have no need for because we want to keep our balance sheet hedged naturally so we prefer local currency financing."
ALI listed the Philippines’ first ASEAN Sustainability-linked bonds amounting to P6 billion, which was issued as the second Tranche of its billion shelf registration for offering and selling debt securities.
Fixed-rate bonds with a principal amount of P10.25 billion were issued as the first Tranche of the 2023 Program on June 26, 2023.
Proceeds from sustainability-linked bonds are intended to finance ALI’s capital expenditure requirements.