ALI eyes up to P30 billion additional capital in H2

MANILA, Philippines — Property giant Ayala Land Inc. (ALI) plans to raise as much as P30 billion more in fresh funds to support a faster capital spending for the second half of the year.

“Our borrowing activity program for the year was about P50 billion, of which P20 billion would go to refinancing. So we’ve completed that,” ALI chief finance officer Augusto Bengzon said.

“In this last semester, we haven’t triggered the borrowing for the P30 billion of new debt as the capex has not been spent just yet. And we’re actually seeing some strength in our internally generated cash flows.  So the budget would be maybe P20 billion to P30 billion of debt to be raised in this last semester. So that’s what we’ve penciled in but we have to finalize the actual funding program,” he said.

Bengzon said the additional funds are intended to be raised through the debt capital markets and some to be funded by banks.

“Typically we have a balanced approach. So we try to mix it up. A certain percentage we access through the debt capital markets. And of course, as you know, we maintain lines with our partner relationship banks. So it will be a mix,” he said.

Last month, ALI successfully raised P20.5 billion through its pioneering sustainability-linked financing program which includes a P6 billion sustainability-linked bond and a P14.5 billion sustainability-linked loan from the International Finance Corp. (IFC).

The sustainability-linked bond with a 10-year term is the first of its kind offered to the public in the Philippines.

The sustainability-linked loan provided by IFC, meanwhile, is ALI’s first loan from a multilateral agency and IFC’s first sustainability-linked loan for a Philippine corporate.

ALI has earmarked P100 billion for capital expenditures this year, 16 percent more than last year’s capex spend of P86.2 billion.

Capital expenditures during the first half totaled P36.5 billion, of which 51 percent were spent on residential projects, 27 percent on estate development, 11 percent on commercial leasing assets and 11 percent on land acquisition commitments.

“The expectation is we’ll be spending a little bit faster in the second semester so our capex guidance of P100 billion is still intact,” Bengzon said.

ALI is currently reinventing its major malls through a P13-billion program that will see the redevelopment of Glorietta and Greenbelt in Makati, Trinoma in Quezon City and Ayala Center Cebu.

The redevelopment, which is being undertaken to cater to the evolving consumer preference, is expected to be completed by 2028.

Alongside the ongoing redevelopment of its major malls is a reinvention of its Seda Hotels and El Nido Resorts with a budget of P7 billion over two to three years.

“We are on track with the reinvention of our key leasing assets and the continuous expansion of our leasing portfolio. Four flagship malls are undergoing reinvention and are progressing well within the 10 to 15 percentage of completion,” ALI president and CEO Anna Ma. Margarita Bautista-Dy said.

“Meanwhile, in the hospitality segment, the renovation of Lagen Resort in El Nido is in full swing and will be completed in 12 months,” she said.

Bautista-Dy said that four hotels would follow suit within the year.

“We are excited about the reinvention we are undertaking both in our key leasing assets as well as in redefining the standards of our residential offerings. These investments position us best for the growth opportunities that we see from the rising affluence of the Filipino market,” she said.