SEC approves issuance of P20-B Ayala bonds

MANILA, Philippines - The Securities and Exchange (SEC) has given Ayala Corp. the go-signal to issue P20 billion bonds within the next three years.

According to documents filed with the SEC, Ayala Corp. would issue an initial P10 billion fixed rate bonds maturing in 2023 while the remaining P10 billion would be placed under shelf registration and ready for issuance within the next three years.

Ayala Corp. chief finance officer TG Limcaoco said the company plans to issue the bonds on July 1.

Interest rate on the seven-year bonds would range from 3.90 percent to 4.15 percent per annum, but still subject to change.

The country’s oldest conglomerate recently received the nod of the Insurance Commission (IC) to consider the P10 billion bonds as an allowable asset of insurance and pre-need companies.

“This shall be considered reserve investment subject to the limitations set forth in the New Insurance Code,” the IC said.

Ayala Corp. received a PRS AAa rating from the Philippine Rating Services Corp. (PhilRatings), the highest rating given by the debt watcher, which indicates minimal credit risk and the issuer’s extremely strong capacity to meet its obligations.

The company’s board earlier approved the filing with the SEC of a shelf registration of P20 billion bonds.

In industry parlance, shelf registration is an option for issuers to register and sell under the same regulatory documents securities which they do not intend to sell right away. The SEC allows for a three-year window.

The bonds shall be issued for a minimum of P50,000 and in multiples of P10,000.

For the first tranche, the net proceeds of P9.9 billion would be used to refinance the company’s maturing peso-denominated debt obligations.

Joint lead underwriters for the offer are BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp. and First Metro Investment Corp.