The International Finance Corporation, the private investment arm of the World Bank, on Thursday committed to purchase the entire P14 billion sustainability bond issuance of property developer Ayala Land Inc.
Ayala Land chief financial officer Augusto D. Bengzon told reporters the IFC committed to complete the transaction by Friday, 19 July.
“We’re hoping to close another first for Ayala Land in 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 said.
According to Bengzon, Ayala Land views the IFC commitment as a loan.
“They’re calling it a bond which they will take down in its entirety but 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 to the Securities and Exchange Commission,” Bengzon said.
He noted that while Ayala Land frequently engages with the IFC every year, this was the first time that the enterprise actually signed a contract with the global development finance arm of the World Bank.
“I think the big difference is they’re quite optimistic about the prospects of the Philippines,” he said.
Bengzon also said this was the first time the IFC agreed to extend assistance in local currency terms instead of the US dollar as was its preference in earlier interactions with Philippine entities.
“In the past they wanted 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,” he said.
Ayala Land listed the country’s first ASEAN sustainability-linked bonds of P6 billion issued as the second tranche of its billion shelf registration, offering and sale of debt securities.
The fixed-rate bonds with principal amount of P10.25 billion were issued as the first tranche of the 2023 shelf program in June last year.
Proceeds from sustainability-linked bonds will finance the company’s capital expenditure program.
