ALI okays P10-billion 5-year notes issue for capex

MANILA, Philippines – Property giant Ayala Land Inc. (ALI) has approved the issuance of up to P10 billion worth of five-year fixed/floating rate corporate notes to fund general corporate requirements and capital expenditures for next year.

In a disclosure to the Philippine Stock Exchange, ALI said it has tapped BPI Capital Corp., Citibank N.A., and the Hong Kong Shanghai Banking Corp. as underwriters for the offering which will be done through a private placement.

 ALI said its board likewise approved the exchange of up to P1.8 billion existing corporate notes for the new notes to be issued.

In addition, the board approved the declaration of a regular cash dividend of P0.046 per share to all shareholders on record as of Dec. 14, payable on Jan. 11, 2011.

The company is aggressively launching new projects in 2011 in anticipation of continued robust demand for new homes as well as office and commercial spaces. Early this year, ALI has set a record sales target of 9,000 units but raised this to 12,000 units by mid-year after noting that sales had already reached over 6,000 in the first half. The delay in some product launches, however, has prompted the firm to downscale the number of units to be developed to just a little over 11,000, which is still way above the original sales target.

ALI operates four major brands – Ayala Land Premier for the high-end segment, Alveo Land for the middle-income segment, Avida Land for the affordable market, and Amaia Land for economic housing.

ALI has set a P27 billion capital expenditure program this year and is likely to spend the same level in 2011 to take advantage of a booming property market where growth is seen across the board.

Higher sales across all business units allowed the property giant to post a 35 percent hike in net profit to P3.94 billion in the nine months ending September this year.

In terms of earnings, ALI expects to post strong growth in 2011 as it starts to book sales from projects launched this year. Sales are recorded based on percentage of completion.

ALI acquired recently the island resort Club Noah from a Japanese-led group of hoteliers that broke away from El Nido Resorts.

The firm is looking at a mixture of malls and office buildings for its foray into real estate investment trusts or REITs. Among these malls include Greenbelt in Makati, Alabang Town Center in Muntinlupa, TriNoma in Quezon City and Market! Market! in Taguig.