Property giant Ayala Land Inc. is preparing a P60-billion debt management program this year to stretch out loan maturities and lower financing costs to prepare its balance sheet for a new expansion push.
Ayala Land chief finance officer Augusto Bengzon said their plans include the sale of about P22 billion in bonds that will be rolled out as early as March this year.
“We are in talks with seven joint lead underwriters and the timing for that is sometime next month leading to a pricing and listing sometime in mid-April to mid-May,” Bengzon told reporters last week.
He said the proposed bonds will have maturities of five years to 10 years, giving the property giant flexibility to manage long-term debt expenses.
“The credit spreads look vey attractive,” Bengzon said. “Based on the five- to 10-year benchmark, we are looking at anywhere between 6.2 to 6.9 percent for the five- to 10-year bonds.”
Ayala Land is in talks with partner banks to refinance the balance of P40 billion, the company executive said.
Plans also include the “opportunistic” repurchase of about P20 billion in bonds this year.
Lower funding costs
“It looks like the terms we could get will allow us to achieve a lower cost on those bonds,” he added.
Ayala Land is planning to further expand amid elevated inflation and high interest rates weighing on the 2023 outlook.
During a briefing last week, company CEO Bernard Vincent Dy said they would boost capital spending by 17 percent to P85 billion this year.
The builder will allocate 39 percent of the budget to the residential sector, which was hit by a higher-than-expected rate of cancellations in 2023.
Nevertheless, reservation sales, an indicator of future revenue, expanded by 14 percent to P104.9 billion.
Dy said the property giant will increase residential project launches by 19.5 percent to P110 billion. This could be upsized further to P130 billion in case of strong demand.
The remaining capital spending budget will be allocated to land acquisition (23 percent), estate development (16 percent), malls (8 percent), offices (4 percent), hotels and resorts (3 percent). INQ