Posted on 08:31 PM, March 17, 2010 [ BusinessWorld Online ]
LISTED AYALA Corp. is planning to raise up to P10 billion through seven-year bonds to fund working capital, the country’s oldest conglomerate told the local bourse yesterday.
“We have filed today the Registration Statement covering the offering of the Ayala peso bonds in the amount of P8 billion, with an oversubscription of up to P2 billion,” Ayala Corp. said.
The P10 billion will be used for working capital requirements, which include investments, said John Eric T. Francia, managing director and head of corporate strategy at Ayala.
Bond holders will have a one-time put option on the fifth year. A put option allows bond holders to prompt the issuer to redeem the bonds before maturity.
The interest rate will depend on the five-year Treasury bonds plus a spread.
The holding firm appointed Bank of the Philippine Islands Capital Corp. as the issue manager.
“The bonds shall be issued in scripless form in minimum denominations of P50,000 each, as a minimum, and in multiples of P10,000 thereafter,” Ayala said.
Ayala Corp. has business arms in banking (Bank of the Philippine Islands), real estate development (Ayala Land, Inc.) and telecommunications (Globe Telecom, Inc.).
Last month, Ayala Land said it might source as much as P10 billion of its P27.17-billion capital expenditure this year from the debt market.
Early this month, the Securities and Exchange Commission approved the plan of property giant Ayala Land to issue P1 billion worth of fixed-rate bonds for potential homebuyers. It is the third tranche of Ayala Land’s “Homestarter” program.
Shares in Ayala Corp., whose profits barely grew at P8.154 billion last year from P8.108 billion in 2008, dropped by P5.00 each on Wednesday, closing at P292.50. -- Neil Jerome C. Morales