Ayala’s planned

P20-B retail bond offering OKd

THE SECURITIES and Exchange Commission has approved a P20billion retail bond offering planned by conglomerate Ayala Corp. under a shelf registration program.

The first tranche of the fixed rate bonds offering is worth about P10 billion due 2023, based on a document from the SEC.

The indicative interest rate on the seven-year bond is between 3.9 percent and 4.15 percent.

Net proceeds from the first tranche will be used to refinance Ayala Corp.’s peso-denominated debt obligations.

Mandated as joint lead underwriters for this offering are BDOCapital & Investment Corp., BPI Capital Corp., China Bank Capital Corp. and First Metro Investment Corp. BDO is the sole issue manager.

Shelf registration allows an issuer to register and sell under the same prospectus and other regulatory filing requirements a certain volume of securities that the issuer does not intend to use up right away.

Under the latest implementing rules and regulations for the Securities Regulation Code, securities to be issued in tranches may be registered for an offering to be made on a continuous or delayed basis for a period not exceeding three years.

For issuers, shelf registration gives some flexibility when determining the best time to proceed with a planned securities issuance amid volatile financial markets. This allows the issuer to complete all the tedious paperwork and thereby lay the groundwork for a future issuance and immediately go to market as soon as conditions turn more favorable.

Ayala Corp., the country’s oldest business house, has interests in real estate and hotels (Ayala Land Inc.); financial services (Bank of the Philippine Islands); telecommunications (Globe Telecom); water distribution and wastewater services (Manila Water Co.); electronics (Integrated Micro-electronics Inc.); automotive; investments in international or overseas projects and ventures; power generation; transport infrastructure, and in education and healthcare.