AYALA Land, Inc. (ALI) is planning to issue bonds that will raise up to P19 billion that it will use to refinance outstanding debt obligations.
In a disclosure to the stock exchange Wednesday, the property developer said its board of directors had approved offering retail bonds and/or corporate notes that will be listed on the Philippine Deal and Exchange Corp., and/or issuing bilateral term loans.
It said proceeds from the offering are to be used to refinance the company’s outstanding loans.
ALI Chief Finance Officer Augusto Cesar D. Bengzon told stockholders in a meeting last month the company was targeting to issue a two-year bond in early June to refinance loans.
“Our new cash flow budget is for the company to pay down a portion of its outstanding debt obligations this year, bringing it to a level equivalent, if not lower than, our 2019 year-end debt levels,” he said in the April 22 meeting.
In the same meeting, Mr. Bengzon said ALI had lowered its capital expenditure budget for 2020 to P70 billion from P110 billion to help it cope with the impact of the coronavirus disease 2019 (COVID-19) pandemic.
He said the company wants to support its capital spending and financing expenses, and possibly reduce its outstanding debt, without the need to raise new capital.
ALI’s total borrowings as of end-2019 is P211.1 billion, up from P187.1 billion in end-2018. Its net debt-to-equity ratio, which measures how much of its financing is supported by debt, is 0.78 last year from 0.72 a year earlier.
In the first quarter of 2020, ALI’s total borrowings stood at P230.7 billion, and its net debt-to-equity is 0.85. Its earnings during the period dropped 41% to P4.3 billion as it saw lower bookings and completions due to the Taal eruption and Luzon lockdown.
Shares in ALI at the stock exchange shed 65 centavos or 2.17% to close at P29.25 each on Wednesday. — Denise A. Valdez