Property developer Ayala Land Inc. plans to raise P60 billion from the debt market to partially fund its P85-billion programmed capital spending for 2023, a top executive said.
ALI chief finance officer Augusto Bengzon said in a recent interview the group was planning to issue P22 billion worth of five-year and 10-year bonds in April.
The company is in talks with seven banks to be the joint lead underwriters for the fund-raising activity, he said.
“The credit spreads look attractive. We are currently looking at credit spread of 25 basis points for the five-year bonds and 30 to 50 basis points for the 10-year bonds. It is very attractive for us to take out term debt because short-end curve is quite elevated,” Bengzon said.
ALI also plans to raise P60 billion from creditor banks to fund maturities and term out its short-term debts. The property firm is initially finalizing a 10-year facility for P5 billion.
“There is quite a nice window for us to take on long-term fixed rate debt, and we are following a rule of spreading out our maturities wherein there will be no single year wherein we have excessively large amount of maturities,” Bengzon said.
ALI earlier announced capital expenditures of P85 billion for 2023, up 18 percent from the 2022 level, to fund the expansion of its residential, mall, office and hotel businesses.
It said bulk of this year’s capital spending would be allotted for the residential business which was planning to launch P110 billion to P130 billion worth of projects.
The company said it remained optimistic about the property business despite the high-interest rate environment.
ALI also set aside 23 percent of the P85 billion for land acquisitions and 16 percent for estate development. The balance will go to other businesses.
ALI will launch four new mixed-use estates in Batangas and Bulacan and two in Mindanao this year.
ALI has 49 integrated estates across the country.