Ayala Land eyes fund-raising in early 2019

AYALA LAND, Inc. (ALI) is planning to register another P50 billion under the Securities and Exchange Commission (SEC)’s shelf registration program, allowing the company to raise money from the issuance of fixed securities in the next three years.

“We’re considering, given that we’ve exhausted the first shelf of P50 billion. We’re looking at registering again either late this year or early next year. I guess a similar amount,” ALI Chief Finance Officer Augusto Cesar D. Bengzon told reporters after the listing ceremony for the company’s fixed rate bonds at Philippine Dealing and Exchange Corp. in Makati last Friday.

Mr. Bengzon said the debt securities program will be a combination of commercial papers, bonds, and other types of fixed income instruments.

“We should be filing probably early next year, because we have completed our funding requirements already for the year,” the ALI executive said.

The listed property giant last Friday used up the P50 billion under its initial shelf registration approved by the SEC in 2016. The company was able to raise P8 billion during the final tranche from the issuance of fixed rate bonds with an annual coupon rate of 7.0239%.

ALI also offered P10 billion in fixed rate bonds during the first half of the year, intended to fund the construction of several mall projects.

The company raised a total of P29 billion in fixed rate bonds from 2016 to 2017, and P3 billion worth of homestarter bonds in 2016.

The bond issuances this year partially financed the firm’s P110.8billion capital expenditure, as ALI ramped up its project launches and construction to take advantage of the growing demand for residential units in the country.

Residential projects cornered bulk of ALI’s capex at 43% or P47.4 billion, while 17% or P18.7 has been allocated for mall projects. Some 12% or P14 billion will be for land acquisitions; P8.5 billion will be for office projects; P7 billion for hotels and resorts; while the remaining P8.8 billion will be for the development of existing estates.

With the accelerated spending, ALI has slated P125 billion worth of project launches this year, higher than the value of 28 projects it unveiled in 2017 at P88 billion.

ALI grew its net income attributable to the parent by 18% to P13.5 billion in the first six months of 2018, after revenues also went up by 18% to P80.4 billion. Reservation sales in the same period stood at P72 billion, indicating P12 billion worth of properties sold every month.

The higher capital spending is in line with ALI’s goal to reach a net income of P40 billion in 2020, with equal contributions from the residential and leasing segments.

Mr. Bengzon noted ALI would have to post a 17% compounded annual growth rate until 2020 to hit its target.