Property developer Ayala Land Inc. (ALI) raised P20.5 billion from its pioneering sustainability-linked financing (SLF) program.
The funding package includes the P6 billion sustainability-linked bond which was listed on the Philippine Dealing and Exchange Corp. Thursday and a P14.5 billion sustainability-linked loan from the International Finance Corp. (IFC).
“This landmark investment drives our efforts in portfolio decarbonization, reinforcing our commitment to a greener property sector in the Philippines,” ALI president and chief executive Anna Ma. Margarita Dy said in a statement over the weekend.
The initiative marks a first for the Philippine real estate sector, adhering to international guidelines and independently verified by Det Norske Veritas.
ALI said the SLF Program is aligned with its financial commitments and environmental targets.
The interest rates on the IFC bonds 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.
The P14.5-billion loan provided by IFC is ALI’s first loan from a multilateral agency and IFC’s first sustainability-linked loan for a Philippine corporate.
The loan, which will be drawn in up to four tranches, supports ALI’s decarbonization efforts and green building initiatives.
“Ayala Land is a leader in sustainability in the Philippine property sector. We are proud to support this landmark investment, which we hope will inspire other industry players to join the green building movement,” said IFC country manager for the Philippines Jean-Marc Arbogast.
The funding will enable ALI to implement energy and water-saving measures across its commercial real estate portfolio, including energy-efficient lighting and cooling systems, passive building design, low-flow water fixtures, and water harvesting and recycling systems.
Meanwhile, the P6 billion worth of fixed-rate bonds sold to the public will have a term of 10 years with interest rate of 6.9931 percent per annum.
ALI said the SLF not only strengthens its position as a sustainability leader in the real estate sector but also sets a precedent for future green financing initiatives in the Philippines.
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