Property giant Ayala Land Inc. plans to raise P30 billion from a mix of debt instruments this year, a period when the company is set to fund a record expansion program.
ALI has obtained approval from its board to raise as much as P20 billion through retail bonds, corporate notes or bilateral term loans with a term of up to 10 years.
If ALI decides to raise the funds from the bond market, retail bonds will be issued under its P50 billion debt securities program as approved by the Securities and Exchange Commission in March last year under the shelf registration window.
ALI has the leeway to issue P25 billion more retail bonds under its shelf registration.
The board also authorized the company to raise P10 billion through the issuance of short-dated notes with a tenor of up to 21 months to refinance the corporation’s short-term loans.
On its long-term borrowing program for this year, the company was thus given flexibility to raise P20 billion from various financing sources.
In the case of corporate notes, this is likewise an option to raise funds by issuing debt paper to no more than 19 institutional investors. Contracting bilateral loans from cash-awash banks is likewise an option for ALI.
This year, ALI has set P88 billion in capital spending, mostly to be funded by internally generated cash.
ALI plans to bring to the local property market about P100 billion in fresh property inventory this year, marking a 64-increase from the previous year, following a banner performance last year.
Over 90 percent of the new launches will consist of residential products, reflecting ALI’s optimism on this segment.
The property firm plans to launch 18,000 residential units this year, more than double the 7,300 units it launched last year.
Meanwhile, ALI’s P88-billion capital spending budget this year also reflects ALI’s sustained optimism on the residential property market. This budget is higher than the P85 billion spent last year.
The biggest outlay this year will be for the residential property business, with a budget of P40.7 billion or 47 percent of total.