Ayala Corporation, one of the largest conglomerates in the Philippines, announced that it has successfully set the terms for a US dollar-denominated fixed- for-life (non-deferrable) senior perpetual issuance on 16 September 2021. The Notes have an aggregate principal amount of US$400 million with a fixed coupon of 3.90% 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% 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%, which represents a 40 basis points compression from the initial price guidance of 4.30% and demonstrates the strong investor confidence in the Ayala name. 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%, 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.
“We are grateful for the steadfast support from our credit investor base despite the current uncertainties in the market brought about by the pandemic. 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”, said Ayala Corporation CFO Alberto M. de Larrazabal.
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% senior fixed-for-life notes and US$400 million 4.85% senior fixed-for- life notes. The tender offer launched on 15 September 2021 and is expiring at 4:00 p.m. (London Time) on 24 September 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.
