ALI generates P20B from SLF program

Ayala Land Inc. (ALI) has raised P20.5 billion from its pioneering Sustainability-Linked Financing (SLF) Program — a first for the domestic real estate sector.

The company said over the weekend that 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 Corporation (IFC). 

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

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

The interest rates of the SL-Bond and SL-Loan are directly tied to ALI’s performance on key sustainability metrics.

These metrics include 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.

Debt papers’ terms

If ALI fails to meet any of these targets, the interest rates of the SL-Bond and SL-Loan will increase by 5 basis points for each unmet target, with a maximum increase of 10 basis points.

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 annually.

The P14.5 billion SL-Loan, provided by IFC, is ALI’s first loan from a multilateral agency and IFC’s first sustainability-linked loan for a Philippine corporation.  The loan, which will be drawn in up to four disbursements, supports ALI’s decarbonization efforts and green building initiatives.