Ayala Corporation Successfully Launches US$400 million senior unsecured and guaranteed fixed for life perpetual notes (“Notes”)

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Ayala Corporation (PSE: AC) (the “Guarantor” or “AC”), one of the largest conglomerates in the Philippines, announced today that it had successfully set the terms of a US dollar-denominated fixed-for-life (non-deferrable) senior perpetual issuance at an aggregate principal amount of US$400 million with a fixed coupon of 4.850% for life with no step-up and no reset, payable semi-annually. The bonds will be issued by AYC Finance Limited (the “Issuer” or “AYC”), a subsidiary whose shares are 100% held, either directly or indirectly, by AC, and will be unconditionally and irrevocably guaranteed by AC.

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. The final order book was over four times over-subscribed with the order book allocated predominantly to Asia, with the rest to Europe, reflecting the strong investors’ confidence in the Ayala name. By investor type, more than half of the offering was allocated to fund managers, insurance companies and pension funds, around one-quarter to banks and financial institutions and the remainder to private banks. The transaction is expected to settle on October 30, 2019.

The issuance of the Notes represents:

– The first fixed-for-life perpetual issuance in the Philippines since April 2018 and marks Ayala Corporation’s return to the international bond market after its debut perpetual fixed-for-life issue in 2017
– The second issuer in Asia Pacific able to price a fixed-for life perpetual in 2019 YTD and the lowest yielding fixed-for-life perpetual ever out of South East Asia

“The successful fixed for life issuance will further support our thrust for sustainable growth and enable Ayala Corporation to diversify our liquidity sources and strengthen our balance sheet. We are very pleased with the strong investor receptivity and continued support” said Ayala Corporation Chairman and CEO Jaime Augusto Zobel de Ayala. “We are grateful for the unwavering support from the investors despite volatile market conditions. This issuance will provide us with additional flexibility to lengthen our maturity profile and support our strategic initiatives.” said Ayala Corporation CFO Jose Teodoro K. Limcaoco.

Upon issuance, the net proceeds from the bonds will be used to refinance the Issuer’s maturing USD-denominated obligations and to fund investments of the Guarantor or its offshore subsidiaries.

The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) is the Sole Global Coordinator for the transaction while BPI Capital Corporation, Credit Suisse (Hong Kong) Limited, HSBC (B&D), JP Morgan Securities plc and UBS AG Singapore Branch are the Joint Lead Manager and Joint Bookrunner for the transaction with the participation of China Bank Capital Corporation and BDO Capital & Investment Corporation as Domestic Lead Managers.

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