Ayala Land not in a hurry to borrow

Ayala Land Inc., the second-biggest builder, is not in hurry to raise funds through the bond market amid plans to raise as much as P50 billion in fresh capital over the next three years.

Ayala Land chief finance officer Jaime Ysmael said in an intervie the company had not decided on the timing and the amount of the capital it planned to raise this year. He said Ayala Land still had sufficient short-term credit lines it could tap to partially finance the company’s funding requirements.

Ysmael said the company also wanted to achieve “just-in-time” funding to avoid negative carry on the company’s books.

“There is no set number [as to how much we will raise this year]. We thought P50 billon is a nice number because we have been raising P15 billion a year. But on the timing, we really want to achieve a just-in-time fund raising, so we don’t incur negative carry,” Ysmael said.

Ayala Land has not filed the registration statement for the shelf registration of P50 billion worth of bonds bond and commercial papers.

Ayala Land’s board last month approved the filing of shelf registration for up to P50 billion of bonds and commercial papers with the SEC. It plans to offer as much as P20 billion of bonds and P10 billion of commercial papers out of shelf registration.

While Ayala Land had sufficient short-term credit lines which it could tap for bridge financing, Ysmael said the company would eventually convert the loans into long term debt instruments like bonds to lock in the interest rates.

“While we like a certain percentage of our borrowings in term of floating rates or short term rates, it is still wise to lock in the majority of funding requirements for long term and and lock in the rates because we have long gestation period for our projects,” Ysmael said.

Ayala Land earmarked P85 billion to P90 billion in capital expenditures this year as the company continues to invest heavily across all business lines, including residential, office and shopping malls development.