PROPERTY developer Ayala Land Inc. on Wednesday said the two state-owned pension funds subscribed to its current P10-billion bond offer. Augusto Cesar D. Bengzon, Ayala Land’s CEO, said pension funds Social Security System (SSS) and Government Insurance Security System (GSIS) bought a combined P1.6 billion from the current P10-billion bond sale of the company.
Bengzon said its 10-year bonds, which remained of the company’s shelf-registered bonds at the Securities and Exchange Commission, have a coupon rate of 5.9206 percent, a 75 basis-point spread from the benchmark five-year bonds.
He said they used the five-year paper as its benchmark rate since its bonds, maturing in 2028, will be repriced in five years.
“We got a tight pricing using the five-year benchmark rates. So you will be buying 10-year bonds for the price of five years. There is a 100 basis-point spread between five-year and 10-year bonds. Our bonds are 1.5 percent oversubscribed,” he said, adding the paper will be listed at the Philippine Dealing and Exchange Corp. next week.
Proceeds of the bond offer will be used to partly fund the company’s P110.8-billion capital expenditures this year. Of the amount, only P15 billion will come from its fund-raising activities, and the rest will be from internally generated funds.
Bengzon said the company already secured a P5-billion, 10-year straight-term loan from a bank, and the rest will be from the P10-billion bond offer.
Ayala Land, meanwhile, said it plans to focus on expanding its Malaysian operations. It already fielded its personnel to that country to operate its project.
“We now really have a platform to plan our expansion in Malaysia,” company President and CEO Bernard Vincent O. Dy said.
It already sent former Ayala Land Premier Head Jose Juan Z. Jugo to become CEO of MCT Berhad. The company is sending its CFO to lead its Malaysian operation.
Dy said the company acquired a 9.8-acre (about 4 hectares) property in Klang Valley, Kuala Lumpur, its first acquisition since the company took over the management of the project.
It will be a mixed-use estate with the residential component targeting the middle-income segment, he said.
Ayala Land already owns 66 percent of MCT and is currently buying out the rest of the company.
Image credits: Alysa salen