Ayala Corporation, one of the largest conglomerates in the Philippines, has successfully raised US$400 million after setting the terms for a US dollar-denominated fixed-for-life (non-deferrable) senior perpetual issuance on Sept. 16, 2021.
In a disclosure to the Philippine Stock Exchange, the firm said the Notes have a fixed coupon of 3.90 percent for life, with no step-up and no reset, payable semi-annually.
The Notes will be issued by AYC Finance Limited, a subsidiary whose ordinary shares are 100 percent held directly by AC, and will be unconditionally and irrevocably guaranteed by AC.
“The Notes were priced at par with a re-offer yield of 3.90 percent, which represents a 40 basis points compression from the initial price guidance of 4.30 percent and demonstrates the strong investor confidence in the Ayala name,” Ayala said.
The final order book was over US$1.75 billion (4.4x oversubscribed), supported by a wide range of high quality investors.
The issuance of the Notes will mark Ayala Corporation's return to the international bond market after its second perpetual fixed-for-life issue in 2019.
At 3.90 percent, the Notes are the lowest yielding unrated perpetual fixed-for-life notes ever and the third lowest perpetual fixed-for-life notes in Asia.
“As we reposition our portfolio to adapt to the rapidly changing environment, the success of this issuance strengthens further our financial position that enables us to scale investments in critical sectors and do our part in helping reinvigorate the Philippine economy", said Ayala Corporation President and CEO Fernando Zobel de Ayala.
Ayala Corporation Chief Finance Officer Alberto M. de Larrazabal said "We are grateful for the steadfast support from our credit investor base despite the current uncertainties in the market brought about by the pandemic.”
He added that, “This capital markets issuance and liability management exercise will further strengthen our balance sheet and provide additional flexibility as we reposition ourselves for a post-pandemic economic recovery.”
The net proceeds from the Notes will be used to refinance the Issuer’s outstanding US dollar-denominated guaranteed undated notes including, among others, through funding the concurrent capped tender offer of its US$400 million 5.125 percent senior fixed-for-life notes and US$400 million 4.85 percent senior fixed-for-life notes.
The tender offer is expiring at 4 p.m. (London Time) on Sept. 24, 2021. The net proceeds will also be used to refinance the Issuer’s other US dollar- denominated obligations.
BPI Capital Corporation, Citigroup Global Markets Singapore Pte. Ltd., Credit Suisse (Singapore) Limited, J.P. Morgan (S.E.A.) Limited, Mizuho Securities (Singapore) Pte. Ltd. and UBS AG Singapore Branch are the Joint Lead Managers and Joint Bookrunners for the transaction.