Ayala raises $400 million of debt at new US dollar bond sale

MANILA — Ayala Corporation raised $400 million during its successful return to the international bond market.

A “wide range of high quality” investors swarmed Ayala’s sale of US dollar-denominated fixed-for-life senior perpetual notes. In a disclosure to the stock exchange on Friday, the Philippines’ oldest conglomerate said investors booked orders of over $1.75 billion for the bonds, exceeding the size of the original offer by over four times.

The robust demand, in turn, pushed down borrowing costs for the company. The new notes fetched a coupon rate of 3.9%, 40 basis points tighter than the initial price guidance of 4.30%. It was “the lowest yielding unrated perpetual fixed-for-life notes ever and the third lowest perpetual fixed-for-life notes in Asia,” Ayala said.

But the money that the company raised will not be used for business expansion. Specifically, Ayala said net proceeds from the offer will be used to pay its US dollar-denominated debts.

“We are grateful for the steadfast support from our credit investor base despite the current uncertainties in the market brought about by the pandemic,” Alberto de Larrazabal, company CFO, was quoted as saying in a statement.

“This capital markets issuance and liability management exercise will further strengthen our balance sheet and provide additional flexibility as we reposition ourselves for a post-pandemic economic recovery,” Larrazabal added.

The last time Ayala tapped the international bond market was back in 2019, when it offered the same amount to investors offshore.

Shares in Ayala inched up 0.31% on Friday to cap the week at P811.5 apiece. (Philstar.com)