Ayala Corp eyes P10B from preferred shares

Manila, Philippines - Ayala Corp., the country’s oldest conglomerate, is eyeing to raise as much as P10 billion through the issuance of preferred shares, a ranking official said yesterday.

Proceeds of the preferred share listing would be used to fund new investments, particularly infrastructure projects, according to Ayala Corp. managing director and treasurer Ramon Opulencia.

The listing may take place later this year or in 2012, he added.

Preferred shares are stocks that regularly pay a higher amount of dividends but without voting rights. They are termed preferred shares because they get preferential claim to the profits ahead of common shareholders.

Yesterday, Ayala Corp. listed P10 billion worth of bonds on the Philippine Dealing and Exchange Corp. (PDEX), a platform for the secondary trading of debt papers.

“The listing of the bonds shall widen the reach of price discovery and transparency for the Ayala issue and enables participation across all markets on PDEX,” Ayala Corp. said in an earlier disclosure.

Ayala Corp. also said it has set the coupon rate on its 10-year fixed rate, multiple, put bonds at 6.8 percent, saying that demand was more than double its offer size of up to P10 billion.

The sale of the bonds, which targeted retail investors, ended on May 6.

The company said proceeds would be used to redeem P5.8 billion worth of preferred shares and to fund operations.

In a statement, Ayala Corp. also said pricing of the bond offers a yield of 30 basis points over the 15-day average of the local benchmark, and indicative demand had reached an estimated P23 billion.

The bond carries a put option on the fifth year from issue date of up to 20 percent of the principal amount and on the eighth year at up to 100 percent.

To help with the debt sale, the company tapped as underwriters BDO Capital Corp., First Metro Investment Corp., Citicorp Capital Philippines, HSBC, ING Bank N.V. (Manila Branch), RCBC Capital Corp., Standard Chartered Bank, and BPI Capital Corp., also the issue coordinator.