Conglomerate Ayala Corp. has returned to the local bond market for the first time in four years, raising P10 billion from a warmly received debt offering that will help fund the group’s postpandemic recovery.
Demand for Ayala’s three- and five-year bonds, which carried a coupon of 3.0260 percent and 3.7874 percent, respectively, reached 10 times the offering. Given such robust demand, the option to upsize the offering by P4 billion from the base offer of P6 billion was exercised. In a press statement on Friday, Ayala president and chief executive Fernando Zobel de Ayala said the successful issuance of the first tranche of the company’s P30-billion debt securities program would support Ayala’s strategic priorities.
“The Ayala group has always been and continues to be an active participant of the capital markets,” said Zobel. “During this [health] crisis, Ayala Corp., Ayala Land, BPI, Globe, Manila Water, and AC Energy raised over P190 billion pesos in combined proceeds from the domestic and international capital markets to allow us to take advantage of opportunities and further solidify our balance sheet during these challenging times.” The oversubscription of the offering allowed Ayala to price the bonds at the lowest end of the market range, thus mitigating its interest expenses.
The offering also set a record as the largest five-year allocation among dual tranche offers during the pandemic, seen as a reflection of the market’s confidence in Ayala’s long-term stability and credit strength. Ayala is set to resume a more aggressive capital spending this year with a budget of P196 billion, larger than the actual capital outlays of P152 billion last year. This year’s budget will support both core and emerging businesses as the firm aims to reclaim a growth trajectory that was disrupted by the pandemic. The bonds were listed yesterday on local fixed income platform Philippine Dealing & Exchange Corp.
Securities and Exchange Commission chair Emilio Aquino thanked the Ayala group for playing an important role in realizing the “capital market’s potential to sustain our economy’s expansion and bring growth to every Filipino.”
“As issuers, you create legitimate investments opportunities. And through the capital market, you make them accessible and thereby allow fellow Filipinos to share with your business success. By pursuing your expansion projects responsibly and sustainably, more of our fellow Filipinos can be employed and will be able to provide for and secure a better future for their families,” Aquino added.