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Ayala to offer P5b more in notes

Property giant Ayala Land Inc. plans to raise another P3 billion to P5 billion in short dated-debts after successfully generating P4.3 billion from the issuance of the pioneering short term financial instrument.

Ayala Land chief finance officer Augusto Bengzon said in an interview at the sidelines of the listing of P4.3 billion worth of short-dated notes due 2019 the company planned to issue similar offerings as early as next month.

Bengzon noted a strong take-up of Ayala Land’s notes offering, the first short-dated securities to be listed or enrolled under Philippine Dealing and Exchange Corp.’s  Qualified Buyers (QB) Board.

Bengzon said the company because of the strong demand instructed underwriters to come up with a follow-up offering to be issued as early as next month, with the size ranging from P3 billion to P5 billion.

“This is actually more cost-effective. It’s longer at 21 months versus commercial papers. The coupon is 2.75 percent versus short term loans of anywhere between 2.6 to 3.25 percent. I believe the cheapest short term loans are in the vicinity of 6 percent if you do a survey of all the banks. So Ayala Land gets very preferential short term rates, but this one is even more preferential, given that it’s quite cheap,” Bengzon said.

Securities and Exchange Commission commissioner Ephyro Luis Amatong during the listing ceremony said he was hoping other companies would consider issuing short-term financial instruments that could be listed with the bond exchange to deepen the country’s capital markets.

“This is a great day for the Philippine capital markets as this will certainly deepen the capital markets and make the QB market visible to investors both here and abroad,” Amatong said.

“This product responds to the demand from trust funds, and unit investment trust funds, for short term instruments. It is the first use of the product of QB board of PDEX and it will now have bonds whose secondary trading  can be facilitated through QB board,” he added.

Ayala Land in May issued P7 billion in 10 year bonds to partially finance the P88-billion programmed capital expenditures for 2017.

Topics: Ayala Land Inc. , short-dated notes , Philippine Dealing and Exchange Corp.
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