ALI vice president and comptroller Jaime Ysmael said the company’s executive committee has approved the bond issue "to finance various capital expenditures and obligations and to raise permanent working capital."
BPI Capital Corp. will act as issue manager for the bonds, which will be priced at 100 percent of face value or at par and carry a term of five years and one day from issue date. Interest rate will be based on prevailing market rates to be determined prior to offering via a bookbuilding process, Ysmael said.
"The bonds, which are to be sold through a general public offering, are expected to tap not only financial institutions but also retail investors as an alternative market," the ALI official said.
He added the bonds are expected to provide the company access to cheaper source of funding. "In conjunction with alternative direct bank loans and standby credit facilities, proceeds from the bond issue shall be applied to ensure an optimum mix of funding terms for its projects," Ysmael said.
"This fund raising initiative is an affirmation of the company’s confidence in the long-term prospects of the real estate industry and its continuing commitment to invest in growth. To further strengthen its strategic position in the industry, Ayala Land thus seeks to increase investment opportunities that may arise in the coming months," Ysmael said.
Among the ongoing and new projects ALI is pursuing to expand its retail-rental business are the redevelopment of Greenbelt Mall and the proposed Market! Market!, a mid-market value mall the company is building on a 9.8-hectare property in Fort Bonifacio. On the residential side, ALI’s projects include Westgrove Heights, Ferndale Homes, Montgomery Place and a reasonably-priced residential condominium in Legaspi Village in Makati.
Earlier, ALI affirmed its ability to pay off its loan obligations, in particular the P5.9-billion worth of long-term commercial papers (LTCPs) maturing in early 2002.
Ysmael said the company is confident it would be able to meet its P5.9-billion LTCP obligations expiring in March and April 2002 through new borrowings and cash generated from existing operations.
In 1997, ALI issued LTCPs totaling P6 billion of which P4 billion are convertible at the option of the holders into shares of stocks of the company based on a predetermined formula.
As of Dec. 31, 2000, total conversions of LTCPs into shares of ALI stocks have amounted to P1.8 million.