Ayala Corp plans to issue foreign currency debt bonds

MANILA, Philippines - Conglomerate Ayala Corp. plans to issue foreign-currency denominated debt bonds with tenors of more than 15 years to fund aggressive expansion plans in infrastructure and power.

“I think there are a lot of opportunities to do ground-breaking deals, and one of the innovations we are thinking is a non-peso denominated listed security, the first in the Philippines for a corporate,” said Ramon Opulencia, managing director and treasurer at Ayala during the listing of the company’s P10 billion bonds on the Philippine Dealing and Exchange Corp. Friday.

Opulencia did not say how much the conglomerate was planning to raise but pointed out the ideal size would not be more than P8 billion.

Some companies issue foreign-currency denominated securities to diversify their investor base and, for large-size bond issues, to exploit fewer credit constraints in more liquid, foreign bond markets.

Opulencia said the holding firm is also considering issuing bonds with longer maturity.

“As we get into more infrastructure-related investments, the need to extend the tenor becomes more compelling.  So we’re looking at several options,” Opulencia said.

The P10 billion bonds issued by Ayala early this month, carry a seven-year maturity with the interest rate set at 5.45 percent per annum.

Proceeds would to be used to fund the group’s requirements to allow it to seize opportunities for expansion both through organic growth of its existing business lines as well as value-accretive acquisitions.

Ayala has always been a consistent and innovative issuer in the domestic capital market over the past few years, raising more than P70 billion from the capital market since 2004.

Last May, the company issued a P10-billion, 15-year bond, the longest-listed bond placed by any Philippine corporation.

Ayala said it has pioneered investment products in the local market that provided the broader investing public, particularly retail investors, with alternative investments.

The conglomerate is making an aggressive push into power generation and infrastructure as it prepares for a new cycle of long-term growth.

Late last year, the conglomerate won the bidding for the Daang Hari connector toll road under the government’s public-private partnership program.

Ayala also forged recently an agreement with the Metro Pacific group to jointly pursue and develop light rail transit projects in Metro Manila.

In the power business, the group is undertaking $2.5 billion worth of projects in line with its goal to build a portfolio of 1,000 megawatts over the next five years.