By Denise A. Valdez, Reporter
AYALA CORP. (AC) has finalized the terms for its dollar bond market return, setting the aggregate principal amount of its fixed-for-life perpetual notes at $400 million.
The listed conglomerate told the stock exchange yesterday the dollar-denominated senior (non-deferrable) notes will have a fixed coupon rate of 4.850% with no step-up and no reset, and will be payable semi-annually.
AC’s wholly owned subsidiary AYC Finance Ltd. will issue the notes, which will be unconditionally and irrevocably guaranteed by the parent company.
“The bonds were priced at par with a re-offer yield of 4.850%, reflecting a 27.5 basis points compression from the initial price guidance,” it said.
As a fixed-for-life perpetual note, investors in the security will not redeem their investment in the bond but will instead be paid a steady stream of interest payments according to the coupon amount.
Allocation of the order book, which was four times over-subscribed, was mostly to Asia and with the rest to Europe. By investor type, more than half was allocated to fund managers, insurance companies and pension funds, about one-fourth to banks and financial institutions, and the rest to private banks.
“The successful fixed for life issuance will further support our thrust for sustainable growth and enable (AC) to diversify our liquidity sources and strengthen our balance sheet,” AC Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala said in the statement.
AC Chief Financial Officer Jose Teodoro K. Limcaoco said the issuance will provide the company with “additional flexibility to lengthen (its) maturity profile and support strategic initiatives.”
The company is targeting to settle the transaction by Oct. 30.
AC said the issuance will be the second fixed-for-life notes in Asia Pacific this year and the lowest yielding of its kind out of Southeast Asia in history. The proceeds will be used to refinance AYC Finance’s maturing dollar-denominated obligations and to fund AC’s investments or its offshore subsidiaries.
In 2017, AC launched its maiden fixed-for-life perpetual bond issuance worth $400 million. It had an annual coupon rate of 5.125% for life with no step-up.
Earlier this week, the company said it is tapping Hongkong and Shanghai Banking Corp. Ltd. (HSBC) as sole global coordinator for the issuance, with BPI Capital Corp., Credit Suisse (Hong Kong) Ltd., HSBC (B&D), J.P. Morgan Securities plc. and UBS AG Singapore Branch as joint lead managers and joint bookrunners.
China Bank Capital Corp. and BDO Capital & Investment Corp. were announced as domestic lead managers for the planned transaction.
AC is the country’s oldest conglomerate which controls several businesses such as Ayala Land, Inc.; Bank of the Philippine Islands; Globe Telecom, Inc.; Manila Water Co., Inc.; AC Energy and AC Industrial Technology Holdings, Inc.
