ALI to raise P5 B from Homestarter bonds

MANILA, Philippines - Property giant Ayala Land Inc. (ALI) is raising a record P5 billion from the innovative Homestarter bond program, completing its fundraising activities from the debt market this year.

The seventh series of the Homestarter bonds will support ALI’s general corporate expenses while allowing aspiring homeowners to save for downpayment.

In a disclosure to the stock exchange, ALI said its board of directors approved management’s plan to offer P5 billion worth of bonds in one or more tranches.

“The bonds, which are to be registered with the Securities and Exchange Commission, will have a term of three years,” ALI said.

“Net proceeds shall be utilized for general corporate purposes,” ALI said, adding that the bonds will be sold through a general public offering to retail investors.

Bondholders, who are notified of newly launched projects of the property firm, may select an ALI-developed property and use the savings as downpayment. Investors will enjoy discounts depending on the amount of investment and the purchase price of ALI residential units.

ALI launched the first Homestarter bond program in 2006, raising P168 million. It secured P504 million through a bond issuance in 2009, P1 billion in 2010, P2 billion in 2011, P1 billion in 2012 and P3 billion in 2013.

ALI listed P8 billion worth of 11-year bonds in fixed income securities trading platform Philippine Dealing and Exchange Corp. last month while affiliate Cebu Holdings Inc. will list its P5 billion bonds next week. The local bond market is enjoying strong growth as companies raise funds for expansion.

The property arm of the Ayala conglomerate will spend P70 billion this year, up from P66.26 billion in 2013, to complete ongoing developments and new launches to help sustain the growth trajectory in the coming years. It also plans to launch 78 projects this year with an estimated value of P142 billion.

In 2013, ALI spent P66 billion for its various projects, backed by a P12.2-billion overnight share sale in March, a P15-billion bond sale in August and a P6-billion bond offering in October.

ALI is primarily into the development of residential projects, lease of commercial and office space and sale of prime lots. The company is also beefing up its recurring income portfolio through new hotels, convenience stores, department stores,

supermarkets and hospitals.

ALI’s net income jumped 25 percent to P3.46 billion in the first quarter from P2.76 billion a year ago while consolidated revenues rose 23 percent to P22.75 billion from P18.52 billion on the back of the strong performance of all business units, from property development to commercial leasing, as well as the services business.