Ayala Corporation’s 7bn peso 12.677% fixed rate note due 2009
BDO Capital & Investment Corporation, BPI Capital Corporation, First Metro Investment Corporation, ING Bank, Land Bank of the Philippines, PCI Capital Corporation and Standard Chartered Bank were joint mandated lead arrangers
To refinance maturing $100m bonds, Ayala Corporation, the Philippines’ largest diversified conglomerate, tapped the domestic market, upsizing an initial 5bn peso offering to
7bn pesos. The decision to turn to domestic markets was part of Ayala’s strategy to shift a greater proportion of its foreign currency-denominated borrowings to the local currency.
With the borrower demanding a fully underwritten proposal, a syndicate of seven local financial institutions was formed to underwrite the issue with a green shoe option.
The significance of the deal was manifold, not least contributing to the development of the domestic capital markets by providing an attractive investment option of considerable size, liquidity and yield. The bond was by far the largest peso-denominated corporate bond issued in the Philippines, attracting a wide investor base.
In addition, it was achieved at very competitive pricing. The coupon of 12.677%, payable quarterly, was the most tightly priced Philippine corporate issue of significant size in recent years.
