Ayala Land considers bond offer to fund ITS-South

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Property giant Ayala Land Inc. (ALI) is considering a bond issue next year to partly finance its 2016 capital expenditures (capex), a senior official said on Wednesday, with the firm having secured the right to build and operate the P4-billion Integrated Transport System-South (ITS-South) project under the government’s public private partnership (PPP) scheme.

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“[The ITS-South] is a terminal with a retail component. The funding plan is still being finalized, but normally … [it will both be]debt and equity, usually 50-50,” Jaime Ysmael, ALI senior vice president, told reporters at the sidelines of the Financial Executives of the Philippines’ annual CFO Awards.

“We don’t know yet as of this point, but generally it is a mix of debt from capital markets as well as bilateral loans. We will time [the issue]appropriately. But we are preparing and we will announce it at an appropriate time. We’ll do it just in time when we need the funds. [The issue] is set next year,” he added.

Ysmael did not give figures, saying the property firm was still finalizing its plans for 2016. Ayala Land has announced that it would likely spend P85 billion to P90 billion next year.

Asked if spending would increase with the ITS-South project, Ysmael replied: “It’s already been factored in our capex. We’re still finalizing budget for next year. We still have to secure board approval so I can’t talk about the plan yet at this point.”

“We don’t have the numbers yet, still finalizing. We will announce it together with our capex plan next year after we release our fourth quarter [results],” he added.

The Department of Transport and Communications awarded the ITS-South project to ALI earlier this month. The project will be located on a 5.57-hectare area within Taguig’s FTI complex, which is also being developed by the Ayala property group into new central business district to be called Arca South.

ALI, a subsidiary of the country’s oldest conglomerate Ayala Corp., is involved in property development, commercial leasing, hotels and resorts, construction and property management.

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