Wednesday, November 11, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
Following the success of its latest Homestarter Bonds, the country’s largest property developer is looking at selling a third tranche next year to Filipinos living overseas.
Jaime E. Ysmael, Ayala Land, Inc. chief finance officer, said in a chance interview yesterday that the company could issue some P1 billion worth of bonds by the first half of next year. This is higher than the P504 million in bonds released in September.
“We are lining up [the] third tranche hopefully in time for our product launches next year so that [it] can further support [our projects]. We are looking at increasing the size [of our third tranche to P1 billion] given the success of [the second Homestarter Bond],” Mr. Ysmael said.
He said the company was pleased with the result of the offer which concluded last month -- the issue was oversubscribed, meaning demand exceeded supply.
Mr. Ysmael however said plans for a third tranche were still in the preliminary stages and that the company was still in discussion with partner banks. But the third tranche will have the same basic features as the previous one, with a few enhancements to encourage more people to subscribe.
“The interest for the bond now is far greater than before because people now are starting to understand the features of the bond. I think the conversation will even be really larger with this new issue,” he said.
The Homestarter Bond is a financing scheme conceptualized by the developer three years ago for those who want to park their money and at the same time use it as downpayment for Ayala Land projects.
Under the financing scheme, buyers need to set aside as low as P5,000 a month only for a bond subscription over 36 months. The total P180,000 will earn 5% a year and will have an additional 10% bonus credit when used as down-payment for Ayala Land properties.
In 2006, Ayala Land launched its first Homestarter Bond, selling P169 million. A total of P125 million worth of Ayala Land properties were subsequently purchased.
“The overseas Filipino market is definitely one of the markets that we would like to tap more systematically,” Mr. Ysmael said.
Ayala Land will release its third-quarter profits today, and Mr. Ysmael hinted that the trend of the third quarter being better than the previous two quarters would continue. However, net income year on year will still be down.
“Overall, [it is still the same]. We cannot reverse it right away because it takes a while but at least, quarter on quarter, trends are still consistent and we are still improving,” Mr. Ysmael said. -- Kristine Jane R. Liu
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