ALI to issue P2-billion bonds

MANILA, Philippines - Property giant Ayala Land Inc. (ALI) is looking at raising a minimum of P2 billion through its “Homestarter” bonds program, a senior official said.

The property developer can generate more funds and stir interest of more investors and potential homebuyers given new offices abroad.

For the fifth tranche of the Homestarter bonds, Jaime E. Ysmael, senior vice-president and chief finance officer of ALI, said the company is looking to secure the same amount as the fourth batch.

“At the very least, the same amount. We will work out the mechanics on how to place it, how to sell it, how to maintain the serial bonds,” Ysmael said in an interview.

Last year, the property firm sold P2.016 billion worth of ALI Homestarter bonds. It is double the P1.008 million bonds sold in the previous year.

“We will see if we can sustain that (momentum)...hopefully the same if not more than the previous level,” Ysmael said.

Under the program, families are required to set aside a minimum of P5,000 per month, or P180,000 in three years. The amount will earn a five percent interest per year.

Bondholders, who are notified of newly launched projects of the property giant, may select an ALI-developed property and use the savings as payment.

While ALI has yet to peg a specific amount, the company is looking at selling the bonds in the second or third quarter.

“Now that we have just completed the P15 -billion retail bond offering, we can start working on other instruments like that,” Ysmael said. The bond sale was completed last month, with the proceeds committed to partly support the record P37-billion capital spending this year.

Ysmael said the Homestarter bonds are not primarily for fundraising “but it is more to attract more customers to buy residential properties.”

ALI launched the first Homestarter bonds in 2006, worth P169 million. It was followed by a P504-million offering in October 2009.