Ayala to issue P10 B bonds on July 1

MANILA, Philippines – Conglomerate Ayala Corp. is targeting to issue the initial tranche of its fixed-rate bonds worth P10 billion on July 1 as the company expressed optimism on the incoming administration, Ayala Corp. chief finance officer Jose Teodoro Limcaoco said.

The July 1 schedule is way ahead of the original plan to issue the bonds in September, he said.

The company is targeting to start offering the bonds to investors from June 20 to 24, with the ongoing book building process to end on June 16.

“This is a bit early. Our original plan is September but we think we wanted to send a signal that we filed right after elections, hopefully the offering, just before inauguration and listing, a day after the inauguration. Good sign that we’re confident of the country,” Limcaoco told The STAR.

He said the P10 billion tranche would be Ayala’s last fund-raising activity for the year.

“But of course opportunistically, if demand is very strong and if I could get something at a very good price, we will see. That is why the shelf registration is there,” Limcaoco said.

The company’s board earlier approved the filing with the Securities and Exchange Commission (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.

Under Section 8.1.2 of the 2015 Implementing Rules and Regulations of the Securities Regulation Code, securities to be issued in tranches may be registered for an offering to be made on a continuous or delayed basis for a period not exceeding three years.

This affords the issuer companies the flexibility when to offer and sell securities within the three-year period, the SEC said.

In its regulatory filing, Ayala Corp. said 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 and Investment Corp., BPI Capital Corp., China Bank Capital Corp. and First Metro Investment Corp.

Moving forward, the company believes the Philippines continues to be fundamentally strong, having remain resilient amid the challenges in the global economy.

“In 2016, the company expects most of its business units to continue growing at a healthy pace. Further, the company will continue to strengthen its growing portfolio of power and infrastructure investments as the company execute various projects. In particular, Ayala expects its power business to sustain positive earnings trajectory in 2016. In addition, the company will continue to explore new investments in healthcare and education, while looking for opportunities to scale up its automotive manufacturing business,” it said.

Ayala Corp. has allotted P174 billion capital expenditure for this year, 34 percent higher than the P130 billion last year.