ALI to raise P 7 B from 10-year bonds

MANILA, Philippines -  Ayala Land Inc. (ALI), the property and mall developer of the Ayala Group, is raising P7 billion through the issuance of 10-year fixed rate bonds, which is part of the company’s P50 billion debt program registered under the shelf registration facility of the Securities and Exchange Commission (SEC).

Proceeds of the transaction will be used to partially fund some of ALI’s projects including upcoming developments worth P49.9 billion, documents submitted to the SEC showed.

These include the development of Ayala’s Intercon property where the company is putting up retail, business process outsourcing offices, hotels and a transport hub. The capital expenditures for the Intercon development is P17.5 billion, according to documents filed with the SEC.

Other projects of ALI that may also use the proceeds from the bond offer include the Ayala Triangle Garden 2, with a capex of P8.6 billion and its Vertis Mall development in Quezon City with a capex of P3.5 billion.

“The completion of the company’s projects will be financed through the net proceeds of the offer and net cash flows from operations. Costs related to the projects, in general, include various construction-related materials and services. Construction materials are procured in bulk and are paid for by thecompany as delivered materials are billed by suppliers. Construction-related services are measured based on percentage of work completed and are billed to and paid by the company based on such progress billings. The net proceeds from the offer, which are expected to be fully utilized in 2017, will be disbursed accordingly,” ALI said.

ALI tapped China Bank Capital Corp., PNB Capital and Investment Corp. and SB Capital Investment Corp. as joint lead underwriters for the P7-billion bond offer.

The company has allotted P87.6 billion for capital expenditure this year, an increase from the P85.4 billion disbursed in 2016.

Of the total amount, bulk or P40.7 billion will be used for residential projects, while ?11.8 billion will be for malls; ?10.6 billion for land acquisition, ?9.2 billion for offices, ?5.5 billion on estates, ?4.8 billion for hotels and resorts and ?4.9 billion for other costs.

Last year, ALI launched 43 new projects worth ?87.8 billion composed of 12 residential projects / office for sale, five shopping centers, four offices and six hotel and resorts.

Furthermore, the company also opened new shopping centers like Ayala Malls South Park, UP Town Center, Solenad and Ayala Malls Legazpi and addition of Tutuban Center, Manila. 

These projects expanded the gross leasable area (GLA) of shopping centers to 1.62 million sqm as of end 2016 document showed.

The company also opened new offices such as Vertis North 1, Ayala Center Cebu, Bonifacio Stopover BGC, UP Technohub Building P, and UP Town Center BPO. 

These projects, meanwhile, expanded the GLA of offices to 836,000 sqm.