Ayala Corp. raising P10B from preferred shares offer

By Doris C. Dumlao

Philippine Daily Inquirer

9:29 am | Friday, October 25th, 2013

MANILA, Philippines–Conglomerate Ayala Corp. has obtained approval from the Securities and Exchange Commission to raise as much as P10 billion from a domestic offering of preferred shares this November.

Ayala plans to issue 20 million in class “B” preferred shares at a maximum price of up to P500 per share, based on a document from the SEC. The offering period will run from November 4 to 8.

Proceeds from the offering will be used to partially refinance certain US dollar-denominated debt due in the last quarter of 2013 totaling P10.25 billion. Funding for the balance of these obligations will be sourced from internally generated funds and/or other credit facilities.

The conglomerate has mandated BPI Capital Corp. as issue manager, underwriter and receiving agent. Other joint lead underwriters are BDO Capital Corp., First Metro Investment Corp., ING Bank, RCBC Capital Corp., HSBC, SB Capital Investment Corp. and Standard Chartered Bank.

Dividend rate on these preferred shares will be based on a 10-year local interest benchmark PDST-R2 plus a spread of 1.25 to 2 percent. This translates to an interest rate range of 4.75 to 5.5 percent per annum based on the current 10-year PDST-R2 rate of 3.5 percent.

AC has the option to redeem the preferred shares on the 10th year and on the 15th year.

The dividend rate will be adjusted upwards on the 10th year and 15th year if not redeemed.

These “class B” preferred shares are non-convertible into common shares and are non-voting. They have preference over holders of common stocks in the distribution of corporate assets in the event of dissolution and liquidation of the corporation and in the payment of dividend.

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Tags: ayala corp. , Business , fund raising , preferred shares offer

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