Ayala Raises P15B From Class B Preferred Shares

Present at the listing ceremony for Ayala's P15 Billion Class B Preferred Shares on October 15 were SEC Commissioner Bryant Fernandez, PSE President and CEO Ramon Monzon, and PSE COO Roel Refran. Ayala was represented by Board Director Fernando Zobel de Ayala, President and CEO Cezar Consing, Chief Finance Officer Alberto de Larrazabal, Chief Legal Counsel Atty. Franchette Acosta, and Treasurer Estelito Biacora.

The P15 billion preferred shares that we list today will help us continue to build businesses that enable people to thrive. [...] Our newer businesses in healthcare, logistics, education, fintech, and electric mobility will benefit from our ability to raise funding at the center. Our objective is to grow these to scale, so that even these relatively newer businesses can have positive impact on the lives of a significant number of our countrymen.

CEZAR P. CONSING
AC President and CEO

Ayala Corporation successfully listed P15 billion Class B preferred shares in the Philippine Stock Exchange on October 15. The company sold a total of 7.5 million shares, including 5 million shares constituting the base size of the offer and an oversubscription of 2.5 million shares to address the substantial demand by institutional and local small investors.

Ayala will use the net proceeds of this issuance to fund the redemption of its P15 billion Class B preferred shares issued in 2019, and callable on November 29. If the optional redemption feature is not exercised, the preferred shares will reprice at the 10-year benchmark rate plus 300 basis points, or roughly 8.73 percent.

"This issuance provides us with the flexibility to redeem the outstanding preferred shares issued in 2019 and allow us to maintain competitiveness in our cost of capital,” said Ayala CFO Albert de Larrazabal. “As we celebrate Ayala’s 190th anniversary this year, we see this issuance as supportive of Ayala’s balance sheet resilience and growth momentum."

The preferred shares were issued at a dividend rate of 6.0538 percent per annum, and had an initial marketing spread of 40 to 95 basis points, which priced at the tightest end of the range at 40 bps. The total book size was P30.2 billion, three times oversubscribed from the P10 billion base offer.

“We are delighted to see strong retail and institutional investor demand, coupled with good market timing and supportive equity and interest rate markets backdrop,” said Ayala Treasurer Estelito C. Biacora. “This issuance translates to a savings per annum of roughly 270 basis points relative to the 2019 preferred shares step-up rate," he added.

BPI Capital served as the sole issue manager. The joint lead underwriters and bookrunners were BPI Capital, BDO Capital, China Bank Capital, RCBC Capital, PNB Capital, and SB Capital, while First Metro Investment Corporation was a selling agent.