MANILA, Philippines — Ayala Corp. has secured its first yen-denominated loan in a deal with two Japanese banks as the Zobel family-led conglomerate looks at expanding its core businesses ahead of its 200th anniversary.
In a statement on Thursday, Ayala said it had signed a term loan agreement worth $200 million with Mizuho Bank Ltd. and Sumitomo Mitsui Banking Corp. (SMBC).
“This maiden yen-denominated loan broadens Ayala Corp.’s partnership with Japanese financial institutions, particularly Mizuho and SMBC,” Ayala treasurer Estelito Biacora said.
“The Samurai loan enhances the Ayala Group’s capital-raising options and helps us better grow businesses that enable people to thrive,” Biacora added.
This came after Ayala was given an “A-” foreign currency long-term issuer rating by the Japan Credit Rating Agency Ltd., allowing the country’s oldest conglomerate to tap loans at “more competitive rates.”
READ: Ayala raises $200M from Samurai debt debut
Cheaper borrowing
Yen loans are seen to be cheaper, especially since Japan keeps its interest rates low amid low inflation and slow economic growth.
Low rates are typically better for companies tapping the yen debt market because these allow them to borrow funds at a lower cost.
The loan deal also comes in the midst of Ayala’s succession planning as it prepares for expansion leading to its 200th year in 2034.
READ: Next-generation Zobels tackle bicentennial Ayala game plan
Mariana Zobel de Ayala and Mark Robert Uy were promoted to managing directors, while Jaime Alfonso Zobel de Ayala and Jaime Urquijo were appointed executive directors.
They were each given specific growth areas, namely real estate, mobility, sustainability and business development.
Ayala hailed 2024 as its “strongest year ever” after booking an all-time high net income of P42 billion, up by 10 percent, buoyed by gains in its core businesses.
Core income, which excludes one-off costs, climbed by a tenth to P45 billion, also its highest in history.
READ: Ayala tags 2024 as ‘strongest year ever’
At the same time, Ayala is set to raise up to P20 billion from an upcoming preferred share sale. The issuance will have a base amount of P10 billion, while another P10 billion would be offered in case of high demand.