IFC invests $100M in bonds of Ayala healthcare unit

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THE World Bank Group’s International Finance Corp. (IFC) is investing $100 million in a 10-year social bond to be issued by an Ayala Corp. foreign subsidiary, the first such instrument to be issued in the Philippine healthcare sector.

Issued through AYC Finance Ltd., the social bond will support Ayala Healthcare Holdings, Inc.’s (AC Health) refinancing to establish a cancer hospital, expand its primary care and multi-specialty clinics, and accelerate digital initiatives.

The social bond is being issued under a new Ayala Health Social Bond framework, as certified by the International Capital Market Association Social Bond Principles, Ayala Corp. and IFC said in a statement Thursday.

Ayala Corp. subsidiary AC Health plans to build an integrated health ecosystem that focuses on retail pharmacy, pharmaceutical distribution, primary care and multi-specialty clinics, tertiary hospitals, and health technology platforms, the company said.

“The pandemic exposed the massive underinvestment in the country’s healthcare system, reinforcing our thesis for entering the sector six years ago,” Ayala Corp. President and Chief Executive Officer Fernando Zobel De Ayala said.

“The Social Bond supports our strategic priority to scale up AC Health as a new growth platform, underpinned by its commitment to uplift the quality and access to preventive care in the country.”

IFC Regional Industry Director, Manufacturing, Agribusiness and Services, Asia and the Pacific Rana Karadsheh Haddad noted how health gaps in the Philippines have been exacerbated by the coronavirus disease 2019 (COVID-19) pandemic.

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

The IFC has also invested $150 million in seven-year social bonds issued by UnionBank of the Philippines, Inc. to finance small business loans.

The Securities and Exchange Commission last year encouraged bond issuers to tap the social bond market to support the economic recovery after the downturn caused by the pandemic.

Ayala Corp. shares fell P1 or 0.11% to P883 Thursday. — Jenina P. Ibanez