ALI raises record P10 B from notes issue

MANILA, Philippines - Property giant Ayala Land Inc. (ALI) said yesterday it successfully raised P10 billion from the issuance of fixed-rate corporate notes which was 75 percent oversubscribed.

The notes, consisting of P5.7 billion in five-year notes, P3.3 billion in 10-year notes, and P1 billion in 15-year notes, were offered by way of private placement to primary institutional lenders.

The strong demand for the issue, with an order book of P17.5 billion, has pushed yields to the lower end of the range.

“The offering represents the largest fundraising initiative by Ayala Land in the capital markets, and also achieved the longest tenor at 15 years for a Philippine corporate institution,” ALI chief finance officer Jaime Ysmael said in a statement.

“This accomplishment is in step with what we expect will be Ayala Land’s largest capex program to date, thereby positioning us well to achieve even stronger results in 2011, having recently closed a banner year in 2010.”

ALI vice-president and treasurer Augusto Bengzon, for his part, said: “The orders received for the offering exceeded our expectations, especially for the 15-year tenor where we achieved very tight pricing.We consider this as a solid indication of the investor community’s confidence in Ayala Land.”

Citicorp Capital Philippines Inc., The Hongkong and Shanghai Banking Corp. Ltd. and BPI Capital Corp. served as joint lead managers and bookrunners for the offering.

Aside from the offering of new corporate notes, ALI simultaneously undertook a liability management exercise by offering to prepay holders of their corporate notes issued in 2006 while inviting these institutions to participate in the new notes issuance.

A number of investors holding on to P875 million of notes maturing in 2013 and 2016 accepted the offer to be prepaid, thereby allowing the company to extend the overall duration of its debt while generating interest cost savings.

ALI operates under four major brands – Ayala Land Premier for the high-end segment, Alveo Land for the middle-income segment, Avida Land for the “affordable” market and Amaia Land for economic housing.

The company remains aggressive in launching new projects this year on robust demand for new homes as well as office and commercial spaces.