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Ayala Land issues first tranche of Homestarter Bonds

Posted on October 31, 2012 08:25:52 PM [ BusinessWorld Online ]

PROPERTY DEVELOPER Ayala Land, Inc. issued on Wednesday the first tranche of its Homestarter Bonds, which have been top-rated by Credit Rating and Investors Services Philippines, Inc. (CRISP) that cited the company’s sound fundamentals.

“Please be informed that Ayala Land issued today, Oct. 31, P1 billion of fixed-rate bonds (the ‘Ayala Land Homestarter Bonds’). The issuance represents the first tranche of the aggregate P3-billion fixed-rate bonds registered with and approved for sale to the general public by the Securities and Exchange Commission (SEC),” Ayala Land said in a disclosure to the Philippine Stock Exchange (PSE) on Wednesday.

The bonds, which will mature three years from issue date, are priced at 100% of face value and have an interest rate of 5% per annum.

Proceeds from the bond issuance will be allotted for Ayala Land’s general corporate spending activities, the firm said.

Upon the bonds’ expected maturity on Oct. 31, 2015, bondholders will have the option to use the Homestarter Bonds’ principal as full or partial down payment for a purchase of an Ayala Land property, or simply have the amount remitted to a designated account, the bonds’ registration statement read.

Local debt watcher CRISP assigned its top AAA credit rating to Ayala Land, citing the property company’s “market leadership, effective land banking strategy, and robust financial performance and high-quality assets,” a statement by CRISP on Wednesday showed.

CRISP also gave Ayala Land a “stable” outlook on its rating, anchored on a similarly bullish forecast on the company’s profits and project portfolio in the near term.

“CRISP assigns a stable credit outlook for Ayala Land’s issuer rating as CRISP continues to believe that Ayala Land’s strong financial performance will continue and rollout of its new development projects will sustain its leadership position,” the statement read.

Ayala Land was organized in 1988 when parent firm Ayala Corp. decided to spin off its real estate division into an independent subsidiary, according to data posted on PSE’s Web site. It went public in 1991.

For 2012, Ayala Land had allotted a record P37 billion in capital expenditures to fund around 67 new projects with an estimated sales value of P90 billion, as well as for the acquisition of new properties, the firm said last February.

Ayala Land grew its net income by 28% to P4.33 billion in the first half from P3.38 billion the previous year, supported by double-digit gains across all its business lines, its latest financial report as of end-June showed.

In the same comparative six-month periods, consolidated revenues rose 18% to P25.02 billion from P21.25 billion, while costs and expenses increased 13.50% to P18.41 billion from P16.22 billion.

Ayala Land shares gained 0.21% or five centavos to P23.55 apiece on Wednesday from P23.50 on Tuesday. -- FJGDLF          
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