Ayala Land May Offer 25-Year Tenor in $486 Million Bond Sale
Ayala Land Inc. said it may sell bonds due in 25 years, the longest maturity for any Philippine corporate debt, as the nation’s largest builder seeks to raise 21 billion pesos ($486 million) to help fund expansion.
The bonds, to be sold through a general public offer, will have tenors of seven, 10 and either 20 or 25 years, Ayala Land said in a stock exchange filing today. President Antonino Aquino said the proceeds will be used to partly finance the company’s 65.5 billion peso spending plan this year.
“The high liquidity in the domestic capital market looking for good corporate paper should allow us to place these bonds at attractive rates,” Aquino said in a mobile-phone message in response to Bloomberg questions today.
Profit at the developer of Manila’s Makati business district climbed to a record 9.04 billion pesos in 2012, helped by a 6.8 percent expansion in the $225 billion economy, the fastest pace of growth in two years. First-quarter net income rose 30 percent to 2.76 billion pesos, the company said May 8.
Ayala Land expects to expand last year’s record profit as the builder takes advantage of a housing shortage and develops business districts outside the capital, Aquino said in a March interview. The company in February announced plans to start 69 projects worth 129 billion pesos this year, while its Chief Financial Officer Jaime Ysmael said at the time it will spend 20 billion pesos to boost its land bank.
The bond sale comes about three weeks after a May 31 explosion at its Two Serendra residential development that killed three people. Gas that may have been ignited by static electricity, a light-bulb spark or other sources may have caused the blast, Interior Secretary Mar Roxas said on June 7.
“The bond sale will be well-received by the market because Ayala Land has good credit standing,” Miguel Agarao, an analyst at brokerage Wealth Securities Inc. in Manila, said by telephone. “Even if property sales are impaired by the explosion at Serendra, it won’t affect the company’s ability to repay the bonds.”
Ayala Land raised 15 billion pesos of 5.625 percent seven-year notes and 6 percent 10-year debt in April last year, according to data compiled by Bloomberg. The company’s 10 billion peso offering in January 2011 included 7.5 percent 15-year bonds, the longest maturity for a Philippine corporate debt.
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