Top developer to raise P15 billion through sustainability-linked bonds

Ayala Land, Inc. (ALI) has announced plans to raise %u20B115 billion through its third Sustainability-Linked Bond issuance, forming part of its broader fundraising program of up to %u20B155 billion by yearend.

The Philippine Rating Services Corporation (PhilRatings) has assigned its highest credit grade of PRS Aaa, with a Stable Outlook, to the proposed %u20B110-billion issuance, which includes an oversubscription option of up to %u20B15 billion. PhilRatings also maintained the top rating for ALI’s outstanding %u20B1104.25 billion worth of bonds.

Bonds rated PRS Aaa are considered of the highest quality with minimal credit risk, backed by an extremely strong capacity to meet financial commitments. A Stable Outlook indicates the rating is likely to hold over the next 12 months.

PhilRatings noted that ALI’s diversified portfolio, strong brand equity, robust growth strategies, experienced management, and synergies with parent firm Ayala Corporation factored into the rating. It also cited the company’s solid earnings, healthy cash flows, and conservative capital structure, alongside its consistent commitment to sustainability initiatives.

ALI is planning to raise 60 percent of its 2025 funding in sustainability-linked formats, including the upcoming bond sale, a recently secured %u20B110-billion multilateral loan, and a scheduled green bond issuance in October.

Former Chief Finance Officer Augusto Bengzon earlier said the firm is taking advantage of expected interest rate cuts in the coming months. “We think interest rates have started to come down, especially on the long end. Hopefully, we’ll see another rate cut on August 28, and then maybe one more toward yearend,” he explained.

The bond proceeds will help ALI pay down maturing debt and finance its %u20B195-billion capital expenditure program this year—12 percent higher than last year. The capex is earmarked for residential development (37 percent), estate development (25 percent), leasing and hospitality (23 percent), and land acquisitions and corporate purposes (15 percent).

The company is also launching %u20B1100 billion worth of new projects this year, including residential, commercial, and industrial properties, while expanding its leasing assets by 170,000 square meters of gross leasable area—78,000 sqm for malls, 50,000 sqm for office spaces, and 44,000 sqm for logistics facilities.