Monday, October 5, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
AYALA LAND, Inc.’s second set of Homestarter Bonds has been received warmly by investors, ensuring that the property firm collects enough cash to spend on its projects well up to next year.
"I do not have the specific results yet but judging from [feedback from] the Ayala group of companies or at least initial reports from the Bank of the Philippine Islands, the interest has high in terms of availment of the bonds," Jaime E. Ysmael, Ayala Land’s chief finance officer, said in a chance interview last Thursday.
Ayala Land, the country’s largest property developer, started selling P504 million worth of Homestarter Bond on September 28. The sale will end this Friday.
The bonds are targetted at investors who want to see their money grow at a faster pace than if they put this in the banks, who may also be potential buyers of Ayala Land projects.
Homestarter Bond buyers need to set aside as low as P5,000 a month over 36 months. The money saved will earn a 5% interest per year.
If the investor chooses to use the total amount as downpayment for an Ayala Land property, then it will earn an additional 10% interest.
Ayala Land first sold Homestarter Bonds in 2006, raising P169 million and selling a total of P125 million worth of Ayala Land properties.
"Right now, Ayala Land is sitting on a huge pile of cash so there is no need to raise funds immediately, [at least] not the in the remaining [months] of the year," Mr. Ysmael said. "We have enough cash for our projects."
But Ayala Land will definitely need the money once it starts promotions for the projects under its three brands — Alveo, Avida and Ayala Land Premier — next year.
Mr. Ysmael, however, said the company has yet to firm up its overall funding requirement.
Ayala Land has also thought up of other schemes to entice buyers. For one, it has tied up with sister firm, the BPI Family Savings Bank, for a three-part series of property exhibits that will run until November.
Dubbed the "Dream Deal," BPI Family Savings Bank will offer lower interest rates of 8.5% to 9.5% for housing loans for five years and waive the appraisal fee. Ayala Land will offer 5% to 10% discounts on units bought during the exhibits.
Ayala Land saw its net profit fall by a third to P2.07 billion in the first half compared to a year ago because of lower residential sales but said it has noted an uptick in housing demand since then. Its shares did not move at P12 on Friday. — Kristine Jane R. Liu
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