ALI to raise P60 B from bonds, bank loans

Real estate giant Ayala Land Inc. is looking to raise about P60 billion from bond issuance and bank loans to help fund its P85 billion capital expenditures for the year as well as for the refinancing of maturing obligations.
In a media briefing, ALI President Bernard Vincent Dy said that, of the P60 billion to be raised, P22 billion will be incremental financing, around P18 billion to P20 billion for refinancing maturing obligations, and P20 billion to call on outstanding bonds.
“The P20 billion is a little bit opportunistic but we think we are going to do it and that is to term-out our short term debt and to call on an outstanding bond as it looks like the terms that we could get will allow us to achieve a lower cost for the bonds that we will call,” Dy said.
ALI Chief Finance Officer Augusto Bengzon said the P22 billion will be raised through a bond offering and there will be seven joint lead underwriters for the planned issuance.
“We plan to kick it off sometime early next month, with its pricing and listing in between April to mid-May. The amount of P22 billion will be split into 5-year and 10-year bonds. For the amounts that will go into both, we are still discussing with our underwriters,” he added.
Bengzon noted that, “The credit spreads look very attractive as we are seeing a credit spread of 25 to 40 basis points for 5-years and 30 to 50 basis points for the 10-years… based on the 5 and 10- year benchmark, we are looking at coupon rates of 6.2 percent to 6.9 percent.”
For the P40 billion, he said ALI is in talks with creditor banks and is closing a 10-year facility for P5 billion.
“This is a good time for us to carry on long-term fixed-rate debt and we are following a rule of spreading out our maturities so that there is no single year where we have an excessively large amount that we need to be financed,” he noted.