ALI raises P7B more in fresh funds from bond market

Local property giant Ayala Land Inc. (ALI) has completed its P15-billion capital market fundraising for the year.

ALI Monday listed on the Philippine Dealing & Exchange Corp. P7 billion worth of fixed rate bonds at a tenor of slightly less than 10 years and at a fixed rate of 4.75 per annum.

“That completes our capital market issue for the year,” ALI chief finance officer Jaime Ysmael said in an interview, adding the latest bond offering was oversubscribed by 2.5 times the base offer.

At end-March, ALI raised an initial P8 billion in 10-year bonds at a fixed rate of 4.85 percent per annum.  This first tranche was likewise oversubscribed by three times the base offer.

ALI separately launched the two offerings to test the market for shelf registration. Under this mechanism, firms are allowed to use one registration for these securities, which will then be issued to the market in increments for a period not exceeding three years. This program gives companies like ALI the leeway to tap the capital market when they need to do so or when the market environment is deemed favorable.

The same team of investment houses led by BPI Capital that worked on the first P8 billion bonds was tapped for the fresh P7 billion issuance. BDO Capital & Investments Corp., China Bank Capital Corp., First Metro Investments Corp., PNB Capital and Investments Corp. and East West Banking Corp. were likewise part of the funding deal.

Ysmael said ALI’s future funding requirements would be covered by bilateral loans.  The company was also mulling over plans to offer a new series of “homestarter” bonds, which allows investors to build up seed money to buy a residential unit under ALI’s brands.

The Securities and Exchange Commission earlier gave ALI the leeway to raise as much as P50 billion from the local debt market to fund future expansion plans under the shelf registration framework.