AYALA LAND, Inc. (ALI) may postpone its real estate investment trust (REIT) offering to next year, as it waits for the final guidelines to be released by the Securities and Exchange Commission (SEC).

“If we can get it this year, or early next year, we’ll just adhere to the SEC timeline, which is really now about the release of the new guidelines,” ALI Chief Finance Officer Augusto Cesar D. Bengzon told reporters last week.

The listed property developer in April said it will place its prime office assets in the Makati Central Business District under a REIT valued at $500 million. The company then said it can conduct the REIT offering under existing SEC rules, in a bid to have the first such listing in the country a decade after Republic Act No. 9856 or the REIT Act of 2009 was implemented.

Mr. Bengzon however noted that the commission would prefer that all companies follow the latest guidelines for such a listing.

“We’ve done quite a bit of work already. It will just need some tweaking when the new rules come out, tweak the prospectus and the registration statement,” Mr. Bengzon said.

Sought for comment on when they can release the final rules, SEC Commissioner Ephyro Luis B. Amatong said they hope to finish it within the year.

“It depends on the number and complexity of the comments we receive,” Mr. Amatong said in a text message.

The SEC on Friday released the draft rules for REITs, which sought to lower the public ownership requirement for REITs to 33%, from the current 40% on the first year which should be raised to 67% on the second year.

Mr. Bengzon said they may reduce their REIT’s public float in line with the new rules. Capital raised is still expected to be within the $300-million level.

Other changes include the requirement to reinvest all proceeds of a REIT offering into the Philippines, in order to promote growth in the capital market and Filipino participation in real estate.

The SEC also wants to create a special committee that will review related party transactions (RPT) for REITs. This will tighten the corporate regulator’s review process for RPTs.

Meanwhile, REIT fund managers will have to secure a license from the SEC, provided that they have a minimum paid-up capital of P10 million for both domestic and foreign firms. This levels the playing field for foreign firms, which are currently required to have a paid-up capital of at least P100 million.

The SEC further adjusted the required track record of officers of a REIT property manager to three years, from the current requirement of five years.

Comments on the proposed guidelines may be submitted to the commission until Oct. 18.

CREDIT RATING
Meanwhile, ALI secured the highest credit rating of its P10-billion fixed rate bonds to be issued next month, according to local debt watcher Philippine Rating Services Corp. (Philratings).

In a statement, Philratings said the bonds with a PRS Aaa rating are of the highest quality with minimal credit risk, with the issuer having an “extremely strong” capacity to meet its obligations. The rating also carries a stable outlook, which means it is unlikely to change in the next 12 months.

Philratings said it took into account ALI’s well-diversified portfolio, sustained healthy outlook for the economy and real estate industry, continuously growing profitability, and sound capitalization.

The bonds will be split between tenors of two years and 7.25 years, as the company said there is demand for short-term offerings. This will be the third issuance out of ALI’s P50-billion debt securities program. It previously raised P8 billion and P3 billion in May and September, respectively. — Arra B. Francia

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