ALI completes P20.5-B sustainable bond issue

This initiative marks a first for the Philippine real estate sector, adhering to international guidelines and independently verified by Det Norske Veritas

Property giant Ayala Land Inc. (ALI) has successfully raised P20.5 billion through its pioneering Sustainability-Linked Financing program.

The funding package includes a P6-billion Sustainability-Linked Bond (SL-Bond) and a P14.5 billion Sustainability-Linked Loan (SL-Loan) from the International Finance Corp. (IFC).

This initiative marks a first for the Philippine real estate sector, adhering to international guidelines and independently verified by Det Norske Veritas.

ALI president and CEO Meean Dy, highlighted the importance of the milestone, saying, “This landmark investment drives our efforts in portfolio decarbonization, reinforcing our commitment to a greener property sector in the Philippines.”

The SLF Program aligns ALI’s financial commitments with its environmental targets.

The interest rates of the SL-Bond and SLLoan are linked to ALI’s performance on key sustainability metrics, including a 42 percent reduction in emissions from malls, offices and hotels by 2030, and achieving EDGE Zero Carbon certification for 1.5 million square meters of office properties by 2025. Failure to meet these targets will result in a 5-basis point increase in interest rates for each unmet target, up to a total of 10 basis points.

Sustainability-linked tranche

The P6-billion SL-Bond, with a 10-year term, is the first of its kind offered to the public in the Philippines. Despite its innovative structure, the bond attracted substantial demand, reaching P18.2 billion and clearing at 30 basis points over the BVAL rate.

The bond, anchored by pension funds and institutional investors, carries a coupon rate of 6.9931 percent per annum.

“In keeping its ESG-focused mentality, we understand that this is also the first fully paperless issuance by a Philippine corporation and kudos to ALI, again, for saving more trees and showing the digital way forward,” Antonio Nakpil, President and CEO, Philippine Dealing and Exchange Corp. (PDEX), said.

The initiative pursued by ALI has been commended by the Securities and Exchange Commission (SEC).

“This move strongly demonstrates your commitment to creating long-term economic, environmental, and social value for your stakeholders. This milestone is not only a significant achievement for the company, but more importantly, for the country as it represents charting new paths for sustainable finance in the Philippines,” SEC Commissioner McJill Bryant Fernandez said.

PHOTOGRAPH COURTESY OF ALI MANAGEMENT committee members and executives of ALI, Securities and Exchange Commission, Philippine Dealing and Exchange Corp., Philippine Depository and Trust Corp. and joint lead underwriters and bookrunners (BDO Capital, BPI Capital, China Bank Capital, LandBank, SB Capital and RCBC Capital) at the listing of the P6-billion Sustainability-Linked Bonds last 18 July.