IFC Invests $ 100 Million in Ayala Foreign Branch Social Bonds


The private sector arm of the World Bank Group, International Finance Corp. (IFC), invested $ 100 million in a new social bond to be issued by a foreign subsidiary of Ayala Corp.

Proceeds from the issuance of the social bond, to be issued by AYC Finance Limited, will support Ayala’s wholly-owned subsidiary, Ayala Healthcare Holdings Inc. (AC Health).

AC Health to refinance the development of a new cancer hospital; expand its network of primary care and multispecialty clinics; and accelerate its digital technology initiatives.

“We are delighted to continue our impactful partnership with the Ayala Group through our investment in the Philippines’ first-ever healthcare-focused social bond,” said Jean-Marc Arbogast, Country Manager, Philippines at IFC.

“This important project will help improve healthcare in the Philippines at a critical time and strengthen the country’s human capital, which are important engines of inclusion and economic growth,” Arbogast added.

Social ties, IFC said, tie the use of funds to projects that aim to achieve positive social outcomes in everything from health and gender education to affordable housing and food security. .

These bonds also offer investors a way to generate returns while helping to solve social problems.

Ayala’s social bond, IFC said, is the first to be issued in the health sector in the Philippines. It will support AC Health’s strategy to create an integrated health ecosystem designed to deliver quality, affordable health care to more Filipinos.

AC Health’s strategy focuses on the following key areas: retail pharmacy; pharmaceutical import and distribution; primary care and multispecialty clinics; tertiary hospitals; and health technology platforms.

“Under-investment”

“The pandemic has exposed massive underinvestment in the country’s health system, reinforcing our thesis of entering the sector six years ago,” said Fernando Zobel De Ayala, President and CEO of Ayala .

“The social bond supports our strategic priority of developing AC Health as a new platform for growth, underpinned by its commitment to improve the quality and access to preventive care in the country,” he added.

IFC said the investment also marks a catalytic step in developing a real sector social bond market in the Philippines.

Previously, IFC also helped promote the country’s green bond market after subscribing to the first two local issues, creating a new asset class that is now adopted by companies across industries.

In light of Covid-19 and the social challenges that come with it, IFC said social bonds are now at the center of the thematic bond market, and demand is higher than ever.

Most of the social bonds issued this year were tied to the financing of pandemic-related issues. Social bond issues reached US $ 165 billion in 2020. As of June 30, 2021, IFC has issued 63 social bonds, raising a total of US $ 3.8 billion.

“Solving the health gaps in the Philippines is a critical challenge that has been magnified by the Covid-19 pandemic,” said Rana Karadsheh Haddad, regional director of industry, manufacturing, agribusiness and services, Asia and Pacific at IFC.

“Our investment in this social bond from our long-time client, the Ayala Group, will help strengthen the health system in the Philippines at a crucial time while helping to develop the social bond market, which is becoming an important tool in helping the private sector sector to manage the socio-economic impacts of the pandemic and build resilience against future shocks, ”she said.

The Social Bond is issued under the new Ayala Health Social Bond Framework. Besides IFC, it was also developed with the help of the Social Bond Principles of the International Capital Market Association (ICMA).

ICMA is an internationally certified institution whose guidelines are designed to promote integrity in the social bond market.

The IFC said cancer is the third leading cause of death in the Philippines, where cancer incidence and mortality are expected to rise steadily over the next 20 years.

About half of patients are diagnosed at later stages, when the results are less promising for patient survival.

The current shortage of medical facilities, beds, doctors and nurses has been exacerbated by the Covid-19 health crisis, which has strained the healthcare system and resulted in overcrowding of hospitals.

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