By James A. Loyola
Arthaland Corporation (ALCO), the green property development firm controlled by the Po family, is planning to be the first local real estate firm to issue ASEAN Green Bonds.
The firm is planning to issue an initial P3 billion worth of green bonds from its three-year shelf registration of up to P6 billion approved by the Securities and Exchange Commission.
ASEAN Green Bonds adhere to the ASEAN Green Bonds Standards which require proceeds to be used exclusively to fund eligible green projects, including certified green buildings.
A regular review on the use of proceeds and quantifiable updates on the funded project’s environmental benefits are also required. Philippine Rating Services Corporation (PhilRatings) assigned an Issue Credit Rating of PRS Aa minus, with a Stable Outlook, for proposed Fixed-rate ASEAN Green Bonds.
ALCO’s proposed ASEAN Green Bonds marks the first green issuance provided with a credit rating by PhilRatings. Obligations rated PRS Aa are of high quality and are subject to very low credit risk.
The obligor’s capacity to meet its financial commitment on the obligation is very strong.
The proceeds from ALCO’s proposed ASEAN Green Bonds will be used mainly to fund additional equity contribution required for the retention of retail and office units in its existing environmentally sustainable projects and the acquisition of a property for a long-term undertaking.
All of the Company’s completed and on-going projects are at least dual certified with the Philippine Green Building Council’s (PHILGBC) Building for Ecologically Responsive Design Excellence (BERDE), and with the US Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED).
One of its office projects, Arthaland Century Pacific Tower (ACPT) in Bonifacio Global City, stands as the only triple-certified green project in the Philippines and the first in the world to achieve the EDGE Zero Carbon Certification under the International Finance Corporation (IFC).
All future developments will likewise aim for such certifications.
PhilRatings said ALCO’s high rating is because the firm is a globally highly recognized real estate developer of dual certified (locally and internationally) green projects in the Philippines.
It also noted the sustained industry growth supported by resilient demand and relatively good economic performance and ALCO’s relatively conservative approach on the management of debt and cost estimates coupled with adequate liquidity.
PhilRatings also considered the volatility of ALCO’s revenues and net income in the last five years, with signs of sustainable growth moving forward backed by a steady project pipeline in the medium term.