ALI vice president and comptroller Jaime Ysmael said the company’s board approved the increase in the offering, as recommended by management, after receiving information from issue manager and lead underwriter BPI Capital Corp. of "strong interest from participating underwriters."
"The P2 billion initial issue was oversubscribed by close to 100 percent," Ysmael said.
He said the estimated net proceeds of the total bond issue worth P2.935 billion will be utilized as follows: P2 billion for the repayment of maturing obligations; P800 million for various capital expenditures; and P135 million for permanent working capital.
The P3-billion bond issue is ALI’s first major fund raising exercise since the P6-billion long-term commercial paper (LTCP) float in 1997, of which P4 billion matured and was fully paid last March 19. The balance of P2 billion will mature on April 23, 2002 which ALI expects to repay in time.
BPI Capital has priced the latest bond issue at 100 percent of face value or at par and carry a term of five years and one day from issue date. Interest rate on the bonds was based on prevailing market rates as determined prior to the offering via a bookbuilding process.
Ysmael said 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 said.
The ALI official added that the company is simultaneously working on funding several ongoing and proposed development projects, with total capital expenditures for the year 2002 expected to be around P4.2 billion.
Among the ongoing and new projects ALI is pursuing to expand in its retail-rental business are the ongoing redevelopment of Greenbelt Mall and the proposed Market! Market!, 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.