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鈥檚 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鈥檚 total funds raised from sustainability-linked securities to P20 billion once finalized.
鈥淚t is the first time that we are doing a deal with the IFC. We鈥檝e been engaging with them every year. This is the first time that we came to terms,鈥 Mr.鈥塀engzon said.
鈥淭hey鈥檙e quite optimistic about the prospects of the Philippines. Secondly, they鈥檙e 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,鈥 he added.
The bonds will have a tenor of eight years and will be used for the renovation of ALI-owned malls.
鈥淭he IFC (loan) is to help fund our reinvention. We鈥檝e started the reinvention of our flagship walls. 鈥淭he bulk of the proceeds of the IFC loan that we鈥檙e looking to close soon are going to be for our malls,鈥 ALI Vice-President and Treasurer Jose Eduardo A. Quimpo II told reporters.
鈥淲hat we鈥檙e doing is looking at dual markets. The first is this capital market side, and on the other, we鈥檙e looking to do it on a private loan market side. We鈥檙e hoping to close another first for ALI within the next 24-48 hours to make this really comprehensive first-time sustainability-linked offer,鈥 he added.
Mr. Quimpo said the bonds will have to meet certain sustainability requirements, such as a 42% reduction in ALI鈥檚 office and hotel emissions by 2030 and to secure EDGE Zero Carbon certification for 1.5 million square meters of office space by 2025.
鈥淭hat鈥檚 part of the commitment of ALI. We鈥檙e able to harness tighter pricing because we are committing to investors that we鈥檙e going to meet these targets,鈥 he said.
鈥淚f we don鈥檛 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,鈥 he added.
Meanwhile, Mr. Bengzon said that ALI will continue to bank on the premium segment to drive the company鈥檚 growth.
鈥淔or this year up to next year, we will lean on the premium segment, which has proven to be extremely resilient,鈥 he said.
On Thursday, ALI shares fell by 2.21%, or 70 centavos, closing at P30.95 per share. 鈥 Revin Mikhael D. Ochave
