CONGLOMERATE Ayala Corp. has debuted a US dollar-denominated fixed-for-life senior perpetual issuance worth $400 million at an annual coupon of 5.125 percent, fixed until maturity date.
The issuance was made through Ayala Corp.’s wholly-owned subsidiary AYC Finance Limited. It is the first corporate fixed-for-life issuance with no coupon step-up in Southeast Asia and the first fixed-for-life note with no step-up (and reset) deal in the Philippines.
“This successful launch of fixed for life notes provides us with the financial flexibility to manage our balance sheet and diversify our sources of capital. We are grateful for the continued support we have received from our investors that is clearly reflected in this issuance,” Ayala Corp. Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala told the Philippine Stock Exchange.
“Finding favorable conditions in a volatile credit market allows Ayala to optimize its average cost of funding while extending its debt maturity profile,” Ayala Corp. Chief Finance Officer Jose Teodoro Limcaoco added.
The pricing of the notes reflected a 50-basis-point compression from initial price guidance. The offering was more than five times oversubscribed, the company said, with investor confidence reflecting the high quality of the Ayala signature.
Of the order book, 19 percent was allocated to Filipino investors, while 10 percent was for European investors and 71 percent for the rest of Asia.
By investor type, 67 percent of the issuance went to fund/asset managers, 12 percent to banks, 7 percent to insurance and pension funds, and the remaining 14 percent to private banks and other investors.
The transaction is expected to settle on September 13, 2017.
Hong Kong and Shanghai Banking Corp. Ltd. (HSBC) was tapped as the global coordinator of the issuance,
and Deutsche Bank A.G., Singapore Branch, HSBC and J.P. Morgan Securities acted as joint lead managers with the participation of BPI Capital Corp. and China Bank Capital Corp. as domestic lead managers.