THE Ayala group recently scored two "firsts" in the history of the Philippine capital market with the listing of AREIT Inc. in the Philippine Stock Exchange on August 13 and the BPI Care Bonds on August 7 at the Philippine Dealing Exchange (PDEX).

The P12.3 billion initial public officering of AREIT in the equity market intends to provide a new asset class to the public, allowing investors to diversify their portfolio and democratize ownership of real property assets in the Philippines.

AREIT's portfolio includes three Grade A properties in Makati with more than 150,000 square meters in total gross leasable area and total occupancy rate of 99.9 per cent. The offer closed on August 3 and was 2x oversubscribed from retail investors as well as international and domestic investors.

The P21.5 billion BPI Care Bonds, the first of its kind in the fixed-income market, not only in the country but also in Asean, will finance and refinance eligible MSMEs under BPI's Sustainable Funding Framework. The bonds have a tenor of 1.75 years and a coupon rate of 3.05 percent per annum, paid quarterly.

The consecutive events, launched right in the middle of Covid-19, speak volumes of the Ayala Group's commitment to restoring investor confidence and supporting the economy.

Speaking during the AREIT launch, Finance Secretary Carlos Dominguez III said: "This public offering is a strong vote of confidence in our good economic prospects and in the resiliency of many of our industry sectors. It shares in the optimism that notwithstanding the global economic downturn today, the Philippine economy has strong fundamentals to rise quickly from the devastation brought about by the global health emergency."

For his part, Ayala Land Inc. (ALI) Chairman Fernando Zobel de Ayala said: "We hope to generate awareness and interest for REITs to encourage other companies to participate.... These are all aimed to promote economic resilience in the face of brewing headwinds caused by the pandemic."

BPI really cares

At the other listing, PDEX President Antonino Nakpil was all praises for the BPI Care Bonds. "It is a measure of Bank of the Philippine Islands (BPI)'s dedication to the Asean Social Bond program, as well as investor confidence in this bond and the sustainable funding framework that underpins it."

SEC Commissioner Ephyro Amatong was no less effusive in his praises for the offering, calling it "pioneering," "transformative" and the first Asean Social Bond whose proceeds will be used to mitigate the economic impact of the pandemic.

BPI President Cezar P. Consing said the bond proceeds will finance or refinance MSMEs -- a sector identified as really needing access to longer term funds and among the hardest hit by the pandemic. The proceeds can go a long way in alleviating the plight of MSMEs, which at the moment account for only 10 pct of BPI loans and yet they account for 60 per cent of the national employment. We hope to be able to do more of these bonds, Consing said.

Earlier issuances

Other Ayala companies earlier successfully tapped the international markets.

On July 7, AC Energy upsized its Senior Green Bonds to US Dollars 470 million, with the launch of a $60 million tap on it Senior Green Bonds due 2024 via private placement. Earlier issuances consisted of $360 million due 2024 and $110 million due 2029. The Green Bonds were issued under AC Energy's $1Billion Medium Term Note Programme begun in 2019, and will be listed in the SGX ST.

On July 16, Globe successfully raised $300 million 10-year and US $300 million 15-year money. The offerings represent the first time that Globe is tapping the international debt capital markets since 2004.

On July 24, Manila Water debuted in the international debt capital markets with $500 million Sustainability Notes. The offering is the single largest green, social or sustainability bond issued by a listed private water utility in Asia and the first Asean Sustainability Bond by a Philippine corporate borrower.

TG Limcaoco, Ayala's CFO, described the results of the foreign offerings as "testaments to the trust that the investment community and regulatory agencies have in the ability of our companies to create value, the strength of our governance and our capacity to execute on our strategies for growth."

Disclosure: The writer is an independent director of Bank of the Philippine Islands.

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