Ayala Corp. said it intends to raise $400 million from a dollar-denominated perpetual notes it will issue, pricing the issuance at a coupon rate of 4.85 percent – for life with no step-up and no reset, payable semi-annually.
The debt will be issued by Ayala unit AYC Finance Ltd. and will be unconditionally and irrevocably guaranteed by Ayala.
The proceeds will be used to refinance the issuer’s maturing dollar-denominated obligations and to fund investments of the guarantor or its offshore subsidiaries.
The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) served as the sole global coordinator for the transaction, while BPI Capital Corp., Credit Suisse (Hong Kong) Ltd., HSBC (B&D), JP Morgan Securities plc and UBS AG Singapore Branch were joint lead manager and joint bookrunners.
China Bank Capital Corp. and BDO Capital & Investment Corp. served as domestic lead managers.
The transaction is expected to be settled by October 30, 2019.
Ayala said the coupon reflects 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,” the company said.
“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,” it added.
Ayala said this is the first fixed-for-life perpetual issuance in the Philippines since April 2018 and marks its return to the international bond market after its debut perpetual fixed-for-life issue in 2017.
It is also the second issuer in Asia Pacific able to price a fixed-for life perpetual in 2019 and the lowest yielding fixed-for-life perpetual ever out of South East Asia, Ayala added.
“The successful fixed for life issuance will further support our thrust for sustainable growth and enable Ayala Corp. to diversify our liquidity sources and strengthen our balance sheet.
We are very pleased with the strong investor receptivity and continued support,” said Jaime Augusto Zobel de Ayala, Ayala chairman.
“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 Jose Teodoro Limcaoco, Ayala chief finance officer.