AYALA Corp. said it plans to issue an initial P10-billion worth of fixed rate bonds to raise funds for debt repayment, with the bond float likely to be conducted in the third quarter.
The P10-bond issue forms part of Ayala Corp.’s proposed P20-bond offering under the Securities and Exchange Commission’s (SEC) shelf-registration program.
Under the shelf registration scheme, Ayala Corp. will initially float P10 billion worth of bonds, with the remaining amount to be issued at some other time.
When approved, the bonds will be listed on the Philippine Dealing and Exchange Inc. Proceeds of the bond float will be utilized to prepay the conglomerate’s peso-denominated debt.
Teodoro Limcauco, chief finance officer of Ayala Corp., said they prefer raising funds early to meet some monetary obligations that will fall due in April next year.
“If you look at our maturity profile, we have enough cash on hand to meet spending needs and meet maturities this year. We just think that it is opportunistic that the Q3 [third quarter]will provide good window for raising money this year,” Limcauco said.
Limcauco was earlier reported as saying Ayala Corp. may issue the bonds in the third quarter this year when the market is expected to be more conducive.
The fixed-rate bonds will have a tenor of seven years and will pay a quarterly coupon based on a rate that is still to be determined.
The bonds will be issued at a minimum denomination of P50,000 each and increments of P10,000.
Underwriters for the bond float are BDO Capital and Investment Corp., BPI Capital Corp., China Bank Capital Corp., and First Metro Investment Corp.
“Ayala reserves the right to redeem the bonds five years after the issuance,” it said.
Last month, the company said it is aiming for a bottom line of P50 billion in 2020, or more than double its net income of P22.3 billion last year.
For 2016, the conglomerate has set aside P174 billion for group-wide capital spending, 34 percent higher than last year’s P130 billion. Bulk of the amount will be infused into its real estate and telecommunications businesses.