Ayala taps banks for planned dollar perpetual notes

MANILA, Philippines — Ayala Corp., the country’s oldest conglomerate, plans to issue dollar-denominated senior perpetual notes.

The company, through its subsidiary AYC Finance Ltd., has mandated a group of local and foreign banks to handle the transaction.

These are Hong Kong Shanghai Banking Corp. Ltd.i (HSBC) as sole global coordinator and BPI Capital Corp., Credit Suisse Credit Suisse (Hong Kong) Ltd. (Credit Suisse), HSBC, J.P. Morgan Securities and UBS AG Singapore branch (UBS) as joint lead managers and joint bookrunners.

The offering will consist of a dollar-denominated fixed-for-life, non-deferrable senior perpetual notes, Ayala Corp. said in a disclosure yesterday.

Company sources said there is no targeted amount yet and that Ayala Corp. simply announced a mandate for banks.

In March, the conglomerate said it was allocating P262 billion for capital expenditures this year.

Bulk of the amount has been earmarked for Ayala Land Inc. (ALI) and Globe, which have set aside P130 billion and P63 billion for capital expenditures this year, respectively.

The company reported a net income of P31.8 billion last year, up five percent on strong earnings contribution from its real estate, telecommunications, and power businesses.

In the first half, Ayala Corp. reported a net income of P37.8 billion, driven by the solid growth of its banking, telecommunications, and real estate units combined with gains from value realization exercises in its emerging businesses

Equity earnings from Ayala’s business units, which include divestment gains from the merger of AC Education with iPeople and partial divestment of AC Energy’s thermal assets doubled to P41.7 billion in the first semester.

Ayala Corp. expects to sustain the growth of its businesses. It is particularly pleased with the rapid expansion of its energy portfolio.

Ayala’s businesses include banking through BPI, telecommunications through Globe Telecoms, property through Ayala Land, energy through AC Energy, water through Manila Water, infrastructure through AC Infrastructure. It is also into health, education, logistics, automotive and manufacturing.