Ayala Corp to raise $400 M from bond sale

Ayala Corp., the country’s oldest conglomerate, is raising $400 million through the issuance of dollar-denominated bonds.

Investors gobbled up the notes with an annual coupon of 5.125 percent for life with no step-up.

The issuance is the first corporate fixed-for-life with no coupon step-up in Southeast Asia and the first fixed-for-life with no step-up (and reset) deal in the Philippines.

The pricing of the notes reflected a 50-basis point compression from initial price guidance.

Ayala said the offering was more than five times oversubscribed, with investors’ confidence reflecting the high quality of the Ayala signature.

According to the disclosure, 19 percent of the order book for the notes was allocated to investors from the Philippines, 10 percent from Europe with the remaining 71 percent from rest of Asia.

“By investor type, the split was 67 percent to fund/ asset managers, 12 percent to banks, seven percent to insurance and pension funds, and the remaining 14 percent to private banks and other investors,” Ayala said.

“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,” said Jaime Augusto Zobel de Ayala, chairman and CEO of Ayala.

Ayala CFO Jose Teodoro Limcaoco said favorable conditions in a volatile credit market allows Ayala to optimize its average cost of funding while extending its debt maturity profile.

“This issue shows how strongly the investor community supports Ayala and our commitment to sustainable businesses and good governance. We are grateful for their support in helping us with this landmark transaction that provides us with permanent capital at a very attractive rate,” he said in a text message.

The company tapped Hongkong and Shanghai Banking Corp. Limited as global coordinator while Deutsche Bank AG Singapore branch, HSBC and J.P. Morgan Securities Plc acted as joint lead managers with the participation of BPI Capital Corp. and Chinabank Capital Corp. as domestic lead managers.

Ayala has businesses in real estate, financial services, telecommunications, water, power generation, industrial technologies, infrastructure, healthcare and education.

Significant investee companies include Ayala Land, Bank of the Philippine Islands, Globe Telecom and Manila Water Co.