ALI targets additional P14 billion sustainability bonds

MANILA, Philippines — Property giant Ayala Land inc. (ALI) is eyeing to clinch a P14 billion sustainability bond deal with the International Finance Corp. (IFC) this week to complete the company’s P20 billion sustainability-linked financing target.

ALI has so far raised P6 billion from the issuance of ASEAN sustainability-linked bonds due 2034, which were listed at the Philippine Dealing and Exchange Corp. (PDEx) yesterday.

On top of this, ALI senior vice president, chief finance officer and chief compliance officer Augusto Bengzon said the company is working with the private sector arm of the World Bank Group on a sustainability-linked financing worth P14 billion.

“They called it a sustainability-linked bond which they will take down in its entirety. In other words, they’ll be the sole investor,” Bengzon said.

“They (IFC) are quite optimistic about the prospects of the Philippines and secondly, they’re willing to extend financing to us in local currency. This is 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 because our revenues and our businesses are primarily based in the Philippines, generating local currency,” he said.

ALI vice president and treasurer Jose Eduardo Quimpo II said the IFC deal is targeted to be sealed this week.

“The bond is part of our entire sustainability-linked program. It’s a sustainability program so what we’re doing is dual markets that we’re looking at. First is this capital market side, public markets and the other one we’re looking to do is on the private loan market side,” Quimpo said.

“So we’re hoping to close another first for Ayala Land say in the next 24 to 48 hours to make this a really comprehensive first time sustainability-linked offering for us. We’re targeting a total of about P20 billion, including this P6 billion (listed in PDEx), which we’re trying to close within this week,” he said.

ALI’s P6 billion issuance serves as the country’s first ASEAN sustainability-linked bonds.

The proceeds will be used to finance the company’s capital expenditure requirements.