International Finance Corporation (IFC), a member of the World Bank Group, is considering a $100-million investment in a 10-year healthcare-focused social bond to be issued by AYF Finance, a foreign subsidiary of Philippine-listed conglomerate Ayala Corporation.
The “Social Bond”, which will be guaranteed by Ayala Corporation, will support the group’s wholly-owned subsidiary, Ayala Healthcare Holdings, in refinancing the development of a cancer hospital, the expansion of its network of primary care and multi-specialty clinics, among others.
It will be the first-ever social bond to be issued in the healthcare sector in the Philippines. It is being issued under the new Ayala Health Social Bond Framework, which was developed with support from IFC.
“The pandemic exposed the massive underinvestment in the country’s healthcare system, reinforcing our thesis for entering the sector six years ago,” said Fernando Zobel De Ayala, President and CEO of Ayala.
The Social Bond supports the group’s 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, Zobel De Ayala added.
The bond’s focus on the development of a new cancer hospital is timely as cancer is the third-leading cause of death in the Philippines.
Addressing health gaps in the Philippines is a critical challenge that has been amplified by the COVID-19 pandemic, according to Rana Karadsheh Haddad, Segional Industry Director, Manufacturing, Agribusiness and Services, Asia and the Pacific at IFC.
“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 is becoming an important tool for helping the private sector to manage the socioeconomic impacts of the pandemic and build resilience against future shocks,” he stressed.
IFC has been actively investing in the bond market in the Philippines. It subscribed to the first two local issuances of green bonds, creating a new asset class that is now being adopted by companies across sectors.
It was the sole investor in BDO Unibank’s green bond in 2017, marking its first green bond investment in a financial institution in the East Asia Pacific region.