Ayala Land Inc. is set to launch its new retail bond offer worth up to P15 billion by April, thereby raising long-term money to boost its record capital spending for this year.
The Securities and Exchange Commission en banc has approved the offering, which will run from April 16 to 20, during its meeting on Thursday. BPI Capital, HSBC, BDO Capital and First Metro Investment Corp. will arrange the offering.
Based on the registration statement, the bond offer will have a size of P10 billion with an oversubscription allotment of P5 billion. The bonds are “callable”, which means ALI has the right but not the obligation to redeem the bonds after a certain period. The seven-year bonds will have a call option on the fifth year or by 2017 while the 10-year bonds will have a call option on the seventh year or by 2019.
The interest rates will have a spread of 40-75 basis points over seven- and 10-year tenors on local benchmark PDST-R2. As of ALI’s filing of the registration statement on March 26, the seven-year PDST-R2 rates ranged between 5 and 5.35 percent a year while the 10-year benchmark had indicative interest rate range of 5.8 and 6.15 percent.
The bonds will be issued at face value. Investors can buy at least P50,000 while incremental investment will be in multiples of P10,000.
Proceeds from the offering will partially support the firm’s record-high P37-billion consolidated project and capital expenditure program for 2012. Fifty-two percent will go to ongoing and new residential projects of ALI such as Park Terraces, West Super Block, Ayala Westgrove Heights, Nuvali projects, other Makati projects, Avida towers in Alabang, Centera, Bonifacio Global City, New Manila, San Lorenzo, Sucat and Cebu.