AYALA PLANS TO RE-ISSUE PREFERRED SHARES | Marvin Germo

AYALA PLANS TO RE-ISSUE PREFERRED SHARES

By: Marvin Germo | September 15, 2019

Preferred Class B Shares

Ayala Corporation (AC) has recently announced that it plans to re-issue preferred class B shares worth P15 billion. In the disclosure made by the firm, it said that the board of directors has given formal consent to the resolution of its Finance Committee for the re-issuance of the preferred class B shares. AC confirmed that this will include P10 billion as the base and up to P5 billion oversubscription option. The company also announced that the terms of the re-issuance of these shares will be disclosed in due course. Here are some of the preliminary information about AC’s preferred shares.

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Date Of Effect

Included in the disclosure of AC is the date of its plan, which followed the company’s redemption of Class B Series 2 Preferred shares that is expected to take effect on November 5. This is also the date of the 5th anniversary from the issuance of its securities. The redemption price of the shares will be P500 each with accrues and unpaid dividends at 5.575% rate annually until the date of redemption. According to the firm, the redemption will minimize the number of foreign shareholders who hold its preferred shares.

Ayala’s Bonds

Just recently, Ayala Land, Inc. (ALI) has received the top rating for its P5-billion fixed-rate bonds as per a local debt watcher. PhilRatings has assigned a PRS Aaa credit rating to the 5-year bonds of ALI. This is considered as the highest on its credit rating scale, which means that the property company has a very strong capability to pay its obligations and meet its responsibilities. With this highest rating, the outlook for ALI is stable as it will not change within the next 12 months. If you are an investor of ALI, use this outlook to guide you through your investing journey with the company together with its plan to re-issue its preferred shares. Though there is no clear evidence yet as to why the company is planning this move except to decrease the number of foreign shareholders, you can still use this information to strengthen your position with AC.

Issuance Of Bonds

The latest P5-billion fixed-rate bonds are already the second issuance from the firm’s 3-year shelf registration program with SEC and worth P50 billion. ALI was able to raise P8 billion worth of bonds earlier this year that belonged to the same registration program. We are done with the first half of 2019 and ALI has more bonds to issue in the coming months until it exhausted the amount it registered. Just stay tuned for updates if you are willing to invest in this property firm.

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