Ayala Group to Issue the Philippines’ First Healthcare-Focused Social Bond with Investment from IFC

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Manila, November 10, 2021-The Philippines' healthcare sector is set to receive a significant boost from a new social bond, which will help refinance the development of a dedicated cancer center in Metro Manila, among other projects.

IFC is investing US$100 million in a 10-year social bond (Social Bond) to be issued by AYC Finance Limited, a foreign subsidiary of Ayala Corporation (Ayala, PSE: AC), which will be unconditionally and irrevocably guaranteed by AC. Proceeds from the Social Bond will support Ayala's wholly owned subsidiary Ayala Healthcare Holdings, Inc. (AC Health) in refinancing the development of a new cancer hospital, refinancing the expansion of its network of primary care and multi-specialty clinics, and accelerating its digital technology initiatives.

The Social Bond - the first ever to be issued in the healthcare sector in the Philippines - will support AC Health's strategy to build an integrated health ecosystem designed to provide quality and affordable healthcare for more Filipinos. AC Health's strategy has the following key areas of focus: retail pharmacy; pharmaceutical importation and distribution; primary care and multispecialty clinics; tertiary hospitals; and health technology platforms.

The Social Bond is being issued under the new Ayala Health Social Bond Framework, which was developed with support from IFC and internationally certified according to the International Capital Market Association (ICMA)'s Social Bond Principles (SBP), whose guidelines are designed to promote integrity in the social bond market.

Cancer is the third-leading cause of death in the Philippines, where cancer incidence and mortality are expected to grow steadily over the next 20 years. Roughly half of patients are diagnosed at later stages, when results are less promising for patient survival. An existing shortage of medical facilities, beds, physicians, and nurses has also been exacerbated by the COVID-19 health crisis, which has put additional strain on the health system and resulted in overcrowding of hospitals.

"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 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."

"The issuance will strengthen Ayala's ESG financing capabilities and support growth for businesses that can make concrete social contribution, particularly in the healthcare industry," said Alberto de Larrazabal, Chief Finance Officer and Chief Sustainability Officer of Ayala. "We look forward to a long-term partnership with IFC in providing quality, and accessible health care for all Filipinos."

The investment also marks a catalytic step in the development of a real-sector social bond market in the Philippines. IFC played a similar role promoting the country's green bond market after subscribing to the first two local issuances, creating a new asset class that is now being adopted by companies across sectors.

Social bonds tie the use of proceeds to projects that aim to achieve positive social outcomes in everything from health and education to gender, affordable housing, and food security, offering an avenue for investors to generate returns while supporting the alleviation of social issues.

"Addressing health gaps in the Philippines is a critical challenge that has been amplified by the COVID-19 pandemic," said Rana Karadsheh Haddad, Regional 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."

"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 drivers of inclusion and economic growth,"

In light of COVID-19 and the social challenges borne from it, social bonds are now front and center of the thematic bond market, and demand is higher than ever. Most social bonds issued this year have been related to funding for issues related to the pandemic. Social bond issuance reached US$165 billion in 2020.

As of June 30, 2021, IFC has issued 63 social bonds, raising US$3.8 billion in total.

About Ayala Corporation
Founded in 1834, Ayala Corporation is one of the largest conglomerates in the Philippines with core interests in real estate, banking, telecommunications, and power. It has a growing presence in healthcare and logistics, and investments in water, industrial technologies, and infrastructure. In addition, Ayala's corporate social responsibility programs are managed under Ayala Foundation.

About AC Health
Ayala Healthcare Holdings, Inc. is a wholly-owned subsidiary of the Ayala Corporation, and serves as the portfolio company for healthcare businesses. Its vision is to build an ecosystem that links every patient to a seamless healthcare experience. Its portfolio includes Generika Drugstore, the pioneer in generic retail pharmacies, IE Medica and MedEthix, pharmaceutical importers and distributors,Healthway, a network of primary care, multi-specialty, and corporate clinics, and QualiMed, a comprehensive network of full-service hospitals, multi-specialty clinics, and a stand-alone day surgery center. AC Health has also invested in various health technology solutions, including HealthNow, a healthcare app that offers online consultations and medicine delivery.

About IFC
IFC-a member of the World Bank Group-is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.

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