Ayala Corp’s P15 billion pref share sale ‘heavily oversubscribed’

MANILA, Philippines — Ayala Corp.’s planned issuance of up to P15 billion worth of preferred shares has attracted strong investor support, resulting in a significant oversubscription.

From Oct. 1 to 7, the country’s oldest conglomerate offered up to five million class B preferred shares with an oversubscription option of up to 2.5 million shares at a price of P2,000 apiece.

“We are very pleased with the strong market demand for Ayala’s preferred share offering,” China Bank Capital Corp. managing director Juan Paolo Colet told The STAR.

He said the capital-raising activity was “heavily oversubscribed” by institutional and retail investors seeking “a blue-chip investment with a fairly high dividend yield.”

Based on the latest available prospectus, the offer shares will carry an initial payout rate of 6.0538 percent, with listing on the Philippine Stock Exchange scheduled for Tuesday.

“With interest rates expected to trend down, fixed income investors are channeling liquidity to quality names offering premium rates,” Colet added.

China Bank Capital served as the joint lead underwriters and bookrunners alongside BPI Capital Corp., BDO Capital & Investment Corp., PNB Capital & Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp.

BPI Capital, meanwhile, was also tapped as the sole issue manager for the transaction, while First Metro Investment Corp. served as the selling agent.

The proceeds from this share sale will be used by Ayala to finance the redemption of the P15 billion class B preferred shares callable next month.

“The balance of the amount necessary to fund the redemption of the shares will be sourced from the company’s internally generated funds and/or other credit facilities, including bank borrowings, as Ayala considers commercially favorable at the relevant time,” Ayala said.

Last week, the conglomerate secured a $200-million credit facility with Ty-led Metropolitan Bank & Trust Co. to fund its investments in emerging portfolios such as technology and payments, health, logistics and mobility.