AYALA LAND, Inc. (ALI) plans to offer nearly P10-billion fixed-rate bonds and raise funds for the early redemption of certain bonds issued by the real estate firm.

The offering is under the sixth tranche of ALI’s shelf-registered P50-billion securities program. It is expected to raise P9.88 billion, net of fees, commissions, and expenses incurred for bond issuance.

“The Securities and Exchange Commission (SEC) has received on March 12 the offer supplement of Ayala Land, Inc. for the public offering of fixed-rate bonds worth up to P10 billion, comprising the sixth tranche of its P50 billion securities program,” the commission told reporters in an e-mail on Friday evening.

Net proceeds from the offering will be used to pay off the company’s short-term loans used to fund the early redemption of ALI’s P8-billion fixed-rate bonds due 2025, which were issued in 2014 with an annual interest rate of 5.625%.

It will also finance corporate requirements related to properties in Laguna and Cavite under Alveo Land, Inc. and to fund an Avida Land Corp. property in Quezon City.

Bonds will be issued at a minimum of P50,000 each and in multiples of P10,000 thereafter. In the secondary market, they will be traded in denominations of P10,000.

The P50-billion bonds program was authorized by the commission in 2019, some P37.25-billion fixed-rate bonds have been issued in five tranches since.

The first tranche of the securities program was issued in April 2019, amounting to P8 billion. The second tranche worth P3 billion was issued in September of the same year, and the third tranche worth P10 billion was issued in the following month.

In 2020, the company issued the fourth tranche worth P10 billion in June and P6.25-billion bonds were issued in the fifth tranche of the program in September.

ALI has tapped BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., East West Banking Corp., and SB Capital Investment Corp. as joint lead underwriters and bookrunners for the bond offering.

The Ayala-led real estate firm posted a 74% drop in its 2020 net income to P8.7 billion from P33.20 billion, while revenues declined by 43% to P96.3 billion last from P168.8 billion.

ALI shares at the stock exchange rose by 1.09% on Friday to close at P37 apiece from P36.60. — Keren Concepcion G. Valmonte