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Ayala Land to raise up to P50B via bonds, commercial papers

Posted on December 01, 2015 10:46:00 PM [ BusinessWorld Online ]
By Krista A. M. Montealegre, Senior Reporter

PROPERTY giant Ayala Land, Inc. (ALI) is taking on more debt with a plan to raise P50 billion through the sale of bonds and commercial papers, the real estate firm said in a disclosure to the stock exchange yesterday.

 

A MAN walks past an advertisement for a condominium in Makati City in this Nov. 7, 2008 file photo. --

Ayala Land’s board of directors approved on Nov. 27 the filing with the Securities and Exchange Commission (SEC) of a shelf registration of up to P50 billion worth of debt securities from which the company intends to sell up to P20 billion in corporate bonds and up to P10 billion in commercial papers next year.

Proceeds will be used for general corporate purposes, the company said.

The company’s shares added 85 centavos or 2.51% to close at P34.70 each on Tuesday.

Ayala Land Chief Finance Officer Jaime E. Ysmael told reporters last month that the issuance of bonds is the preferred fund-raising mode of the company.

The property firm has yet to finalize its capital expenditure plan for next year, but initial indications point to a range of P85-90 billion to support the high level of spending required to grow its residential, shopping mall, office and hotel businesses, Mr. Ysmael had said.

The projected 2016 capex budget is roughly the same level compared to the downward revised P80-90 billion for this year. The property firm’s capex have reached P60.3 billion as of September.

Ayala Land is not in a hurry to raise funds even with the prospects of higher interest rates in the United States on expectations that borrowing costs will not move up significantly and liquidity will remain high, Mr. Ysmael had said.

Ayala Land has undertaken two fund-raising activities early this year to finance its capex this year.

In January, the property giant raised P16 billion from an overnight top-up placement, the single largest capital-raising exercise in the 23 years that the property giant has been a listed company.

Ayala Land returned to the bond market in April with a P7-billion issuance, the final tranche of a P15-billion bond offer that was approved by the SEC last year.

Ayala Land’s net profit grew 19% to P12.8 billion in the first nine months of the year from P10.79 billion a year ago, anchored on a 10% jump in consolidated revenues to P75 billion.

The firm is targeting a 20% annual growth rate to hit a net income of P40 billion by 2020 under its “2020 Vision.”

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