LISTED property developer Ayala Land, Inc. (ALI) said it is eyeing a P14-billion sustainability-linked bond issuance with the International Finance Corp. (IFC) to fund its mall renovation efforts.
ALI’s Chief Finance Officer Augusto D. Bengzon said on the sidelines of a listing ceremony in Makati City on Thursday that plans for an additional P14 billion in funding are underway.
ALI listed its P6 billion ASEAN sustainability bonds at the Philippine Dealing & Exchange Corp. on Thursday, which will bring the company’s total funds raised from sustainability-linked securities to P20 billion once finalized.
“It is the first time that we are doing a deal with the IFC. We’ve been engaging with them every year. This is the first time that we came to terms,” Mr. Bengzon said.
“They’re quite optimistic about the prospects of the Philippines. Secondly, they’re willing to extend financing to us in local currency. In the past, they wanted to extend in dollars, which we had no need for because we wanted to keep our balance sheet hedged naturally,” he added.
The bonds will have a tenor of eight years and will be used for the renovation of ALI-owned malls.
“The IFC (loan) is to help fund our reinvention. We’ve started the reinvention of our flagship walls. “The bulk of the proceeds of the IFC loan that we’re looking to close soon are going to be for our malls,” ALI Vice-President and Treasurer Jose Eduardo A. Quimpo II told reporters.
“What we’re doing is looking at dual markets. The first is this capital market side, and on the other, we’re looking to do it on a private loan market side. We’re hoping to close another first for ALI within the next 24-48 hours to make this really comprehensive first-time sustainability-linked offer,” he added.
Mr. Quimpo said the bonds will have to meet certain sustainability requirements, such as a 42% reduction in ALI’s office and hotel emissions by 2030 and to secure EDGE Zero Carbon certification for 1.5 million square meters of office space by 2025.
“That’s part of the commitment of ALI. We’re able to harness tighter pricing because we are committing to investors that we’re going to meet these targets,” he said.
“If we don’t meet those targets, the rates will step up. Each requirement is valued at five basis points (bps). The rates will step up by five bps on an annual basis,” he added.
Meanwhile, Mr. Bengzon said that ALI will continue to bank on the premium segment to drive the company’s growth.
“For this year up to next year, we will lean on the premium segment, which has proven to be extremely resilient,” he said.
On Thursday, ALI shares fell by 2.21%, or 70 centavos, closing at P30.95 per share. — Revin Mikhael D. Ochave
