Ayala Land sets P50-B, three-year bond pipeline

The Securities and Exchange Commission (SEC) approved Zobel-led Ayala Land Inc.’s P50 billion borrowing program as the property giant prepares to launch a multibillion-peso bond sale later this month.

The so-called shelf registration of bonds—approved by the SEC on June 6—allows the developer to more easily launch bond offerings over the next three years.

The first tranche involves the sale of P12.25 billion to P17.25 billion in five-year and 10-year bonds.

Ayala Land will combine this with another P4.75-billion bond offer to raise nearly P22 billion to lower debt costs and partly finance capital expenditures.

The builder said in a previous deal prospectus the bonds will be offered to the public from June 14 through June 20 this year.

Listing date

The target listing date on the Philippine Dealing and Exchange Trust Inc. is on June 27.

About half of the total proceeds, or P10.4 billion, will be used to finance capital expenditures, including land acquisition and project development costs for its various residential, office and leisure segments, the prospectus showed.

Ayala Land will allocate P10 billion to refinance short-term loans that were used to pay for the early redemption of its 5.92 percent bonds issued in 2018.

Finally, Ayala Land plans to allocate P1.33 billion to partially refinance outstanding shortterm loans, including those drawn from Metropolitan Bank & Trust Co. and Hongkong and Shanghai Banking Corp. Ltd., the prospectus showed.

Underwriting team

The developer hired BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., EastWest Banking Corp., First Metro Investment Corp., RCBC Capital Corp., and SB Capital Corp. as joint lead underwriters and bookrunners for the offer.

The new bond sale will strengthen Ayala Land’s balance sheet as it prepares to continue aggressive expansion in 2023.

The developer earlier announced plans to boost capital spending by 17 percent to P85 billion this year.

Ayala Land will also increase residential project launches by 19.5 percent to P110 billion. This could be upsized further to P130 billion in case of strong demand.

During the first quarter of 2023, Ayala Land said net income jumped by 42 percent to P4.5 billion while total revenues climbed 26 percent to P30.9 billion.