Ayala Corp raises P10 B from bond issue

MANILA, Philippines - Ayala Corp., the country’s oldest conglomerate, has successfully raised P10 billion in seven-year fixed rate bonds in a deal that was 180 percent oversubscribed.

The company listed the bonds at the Philippine Dealing System yesterday, the country’s fixed income exchange, in a ceremony led by Ayala Corp. chairman and CEO Jaime August Zobel de Ayala and Securities and Exchange Commission (SEC) chairperson Teresita Herbosa.

Ayala Corp.’s P10 billion listing marks the first fixed income listing under the Duterte administration.

With a rate of 3.92 percent, the bonds would be used for refinancing purposes, said TG Limcaoco, CFO of Ayala Corp.

“This is a great opportunity to raise funds. Investors were very receptive. It was oversubscribed by 180 percent. We priced it at very low end of the range,” he also said.

Asked when the company would proceed with the remaining P10 billion of its total P20 billion shelf registration with the SEC, Limcaoco said everything would depend on market conditions.

“The SEC is very efficient so we can go anytime for more than that. The P20 billion shelf registration gives us another opportunity to issue P10 billion,” he said.

The next company to list would be SMC Global Power Holdings Corp., SMC’s power generation arm, which is targeting to issue P15 billion worth of fixed-rate bonds on July 11.

The rates for SMC Global Power bonds are as follows: 4.34 percent per annum for the five-year bonds, 4.75 percent per annum for the seven-year bonds and 5.18 percent per annum for the 10-year bonds.

Also in the pipeline is SM Prime Holdings’ 10-year 2026 bonds amounting to as much as P10 billion, scheduled on July 25.

“Today’s event marks the first of three listings expected in July 2016 totaling P35 billion in July, an auspicious beginning under the new administration and a definite sign of the positive outlook of corporate sector of the ‘changes now happening,” said PDEx chairman and CEO Cesar Crisol.

“Today’s P10 billion, seven-year fixed rate bond is the first tranche of the bond series covered under Ayala Corp.’s P20 billion shelf registration, and shall make Ayala one of the leading corporate issuers with its total listed issues at P50 billion, representing 8.9 percent of the P561.16 billion of bonds listed at PDEx,” Crisol added.

The Ayala Group’s total share of listed issues of P143 billion will be 25 percent of the overall outstanding listed corporate bonds,” he noted.

Joint lead underwriters for Ayala’s issuance were BPI Capital, BDO Capital, First Metro and China Bank Capital while co-lead underwriters were East West and PNB.