AYALA Corp. has filed a P20-billion shelf registration of its fixed-rate bonds with the Securities and Exchange Commission (SEC). Half of the amount will be issued immediately.
Ayala said it will issue the P10 billion shortly after regulatory approval, proceeds of which will be used to refinance the company’s early redemption of a peso-denominated debt.
Teodoro Limcauco, the company CFO, said its obligation is still set to mature by April next year. The company prefers to prepay the loan.
“If you look at our maturity profile, we have enough cash on hand to meet spending needs and meet maturities this year. We think it’s opportunistic the third quarter will provide good window for raising money this year,” Limcauco said.
Ayala said the bonds will have a tenor of seven years, paying quarterly coupon based on a rate that is yet to be set.
The bond will be rated by the Philippine Rating Services Corp., and will be listed with the Philippine Dealing and Exchange Corp.
Buyers can purchase bonds at denominations of P50,000 and incremental of P10,000.
BDO Capital and Investment Corp., BPI Capital Corp., China Bank Capital Corp. and First Metro Investment Corp. have been picked as joint lead underwriters for the offer.
Ayala reserves the right to redeem the bonds five years after the issuance.
The country’s oldest conglomerate earlier said it plans to double its profit to P50 billion by 2020, as part of its five-year plan. Ayala closed 2015 with profits of P22.3 billion, up 20 percent from the prior year’s P18.6 billion.
Jaime Augusto Zobel de Ayala, the company’s chairman and CEO, earlier said the group’s five-year plan beginning this year includes more than doubling its P22.3-billion net earnings last year.
Last year’s net income was nearly 20 percent higher than the P18.6-billion net earnings realized from a year earlier.
The “Ayala 2020” plan also intends to improve return on equity to 15 percent, from the current 12.1 percent; expand equity earnings contribution of businesses outside its four largest business units to 20 percent; and increase the group’s presence in Southeast Asia to 10 percent of equity earnings by 2020.
Ayala said amid the country’s political changes, the group, which already invested P500 billion in the country during the last five years, remains optimistic about the overall environment in the Philippines.
“As part of our 2020 plan, we are upbeat about our investments in new platforms, specifically along three clusters: power and transport infrastructure, health care and education, and automotive and manufacturing,” he said.
The group plans to keep the bulk, or 90 percent, of its business in the domestic market, while the remainder would be for its expansion overseas.