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Ayala Land gets P10B from sale of notes

Posted on January 18, 2011 10:09:20 PM [ BusinessWorld Online ]
AYALA LAND, Inc. has obtained P10 billion from the sale of corporate notes in what the listed property giant said was the firm’s largest fund-raising exercise in the capital markets so far.
Part of the proceeds will be used to finance a record capital expenditure this year, with Ayala Land remaining bullish on the real estate market.
“Ayala Land raised P10 billion through an issuance of fixed-rate corporate notes, which was offered to primary institutional lenders,” the property firm said in a statement yesterday.
The fund-raising scheme consisted of P5.7 billion in five-year notes, P3.3 billion in 10-year notes, and P1 billion in 15-year notes.
Ayala Land obtained interest rates of 5.625% for the five-year notes, 6.875% for the 10-year notes, and 7.5% for the 15-year notes.
Orders reached P17.5 billion, or an oversubscription of 75%.
“The offering represents the largest fund-raising initiative by Ayala Land in the capital markets, and also achieved the longest tenor at 15 years for a Philippine corporate institution,” Jaime E. Ysmael, senior vice-president and chief finance officer of Ayala Land, said in the statement.
“The orders received for the offering exceeded our expectations ... We consider this as a solid indication of the investor community’s confidence in Ayala Land,” Augusto D. Bengzon, vice-president and treasurer of Ayala Land, said in the same statement.
“This accomplishment is in step with what we expect will be Ayala Land’s largest capex program to date, thereby positioning us well to achieve even stronger results in 2011, having recently closed a banner year in 2010,” Mr. Ysmael said.
The listed company announced the offering in December and tapped Citicorp Capital Philippines, Inc., The Hongkong and Shanghai Banking Corp. Ltd., and BPI Capital Corp. as joint lead managers and bookrunners.
This year, the property giant wants to launch more projects and may match last year’s target of 12,000 residential units. It may also top 2010’s P27 billion in capital expenditures.
Ayala Land also said it had conducted a “liability management exercise by offering to prepay holders of corporate notes issued in 2006 while inviting these institutions to participate in the new notes issuance.”
Investors holding P875 million worth of notes maturing in 2013 and 2016 accepted the offer.
Ayala Land said this allowed the company to extend the overall duration of its debt while generating interest savings.
Ayala Land operates under four major brands -- Ayala Land Premier for the high-end segment, Alveo for the middle-income segment, Avida for the “affordable” market and Amaia for economic housing. It is also into shopping centers, office space rental, and the tourism and hotel businesses.
Shares in Ayala Land, whose profits surged by 35% to P3.94 billion in the nine months that ended in September last year, closed P0.06 lower at P15.74 apiece yesterday. -- Neil Jerome C. Morales
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