Ayala plans P15-B preferred shares offer

SCREENGRAB from www.ayala.com.ph

MANILA—Ayala Corp. plans to raise as much as P15 billion from an offering of a new tranche of perpetual preferred shares.

In a disclosure to the Philippine Stock Exchange on Tuesday, Ayala said its board has approved the issuance of up to 30 million of this new “Class B” series of preferred shares at P500 per share, which would have a fixed quarterly dividend rate.  These will be structured as perpetual equity securities that have preference in the payment of dividends.

“Class B” securities means that they will be made available to both local and foreign investors, as distinguished from “Class A” shares which are open only to local investors.

The board has authorized the setting of the rate based on either the five-year or seven-year local interest rate PDST-R2 benchmark plus a spread.

These shares will be non-convertible to common shares and will not have voting or pre-emptive rights.  Payment of dividends will be cumulative.

If the shares are not redeemed at the end of either the fifth or seventh year from date of issue, the dividend yield will be reset to whichever is higher of these: the original dividend yield or the five- or three-year PDST-R2 rate on the prevailing optional redemption date plus a spread.

Further, if the shares are not redeemed at the end of the 10th year, the dividend yield shall be reset to whichever is higher: the adjusted dividend rate or the then prevailing 10-year PDST-R2 plus a spread.

BPI Capital Corp. was mandated as the issue manager for this issuance.

The preferred shares will be listed on the Philippine Stock Exchange.

The issuance is still subject to regulatory approvals.  As of mid-morning Tuesday, Ayala said it was preparing the registration statement to be filed with the Securities and Exchange Commission together with applications to be filed with the PSE.