ALI to issue P1.06-B fixed rate notes

Property developer Ayala Land Inc. (ALI) will issue P1.06-billion worth of fixed rate corporate notes (FXCNs) as its first step in a major fund raising program set this year.

ALI vice president and comptroller Jaime Ysmael told the Philippine Stock Exchange that the FXCNs will be issued at par (or 100 percent) with interest rates based on three-year, five-year, seven-year and 10-year tenors.

For the three-year notes, the interest yield will amount to 11.875 percent; 13.25 percent for the year five-year papers; 14.5 percent for the seven-year bills; and 14.875 percent for the 10-year FXCNs.

The Hong Kong and Shanghai Banking Corp. (HSBC) has been appointed as the arranger for the FXCN issuance.

Ysmael said interest on the notes will be calculated on a 30/360-day basis and will be paid semi-annually in arrears.

"The company may redeem all (but not part only) of the Notes on the 2nd, 3rd, 4th and 7th anniversaries, respectively, of the FXCNs," he added.

ALI had planned to issue P2-billion worth of commercial papers (CPs) to the public early this year for its first major fund raising exercise since the P6-billion long-term commercial paper (LTCP) float in 1997.

The company said the bond issue will be used "to finance various capital expenditures and obligations and to raise permanent working capital."

"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," Ysmael 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," he added.

Among the ongoing and new projects ALI is pursuing to expand its retail-rental business are the ongoing redevelopment of Greenbelt Mall and the proposed Market! Market!, a mid-market value mall it 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. – Conrado Diaz Jr.