One of the Philippines’ largest conglomerates Ayala Corporation returned to the US dollar bond market as it priced on September 16 another fixed-for-life senior perpetual offering amounting to US$400 million.

The unrated notes were priced at par with a coupon of 3.90% for life, with no step and no reset, payable semi-annually. The re-offer yield is likewise set at 3.90%, which was 40bp tighter than the initial price guidance of 4.30% area. This are the lowest yielding unrated perpetual fixed-for-life notes ever and the third lowest perpetual fixed-for-life notes in Asia.

The notes were issued by AYC Finance, a subsidiary whose ordinary shares are 100% held directly by Ayala, which previously accessed the international debt capital markets in 2019. The deal was 4.4x oversubscribed as it attracted a final order book exceeding US$1.75 billion from a wide range of high-quality investors.

In addition to the new notes, Ayala also announced a concurrent tender offer of its two senior fixed-for-life notes – US$400 million 5.125% notes and US$400 million 4.85% notes, each subject to a maximum acceptance amount to be announced by the company. The tender offer will expire at 4pm, London time, on September 24 2021.

The notes issuance and the tender offer are part of Ayala’s active liability management exercise that aims to take advantage of capital markets opportunities, if and when they arise.

“As we reposition our portfolio to adapt to the rapidly changing environment, the success of this issuance strengthens further our financial position that enables us to scale investments in critical sectors and do our part in helping reinvigorate the Philippine economy,” says Ayala president and chief executive officer Fernando Zobel de Ayala.

“This capital markets issuance and liability management exercise will further strengthen our balance sheet and provide additional flexibility as we reposition ourselves for a post-pandemic economic recovery,” adds Ayala chief financial officer Alberto de Larrazabal.

The net proceeds from the notes will be used to refinance Ayala’s outstanding US dollar-denominated guaranteed undated notes, including, among others, through funding the concurrent tender offer and other US dollar-denominated obligations.

BPI Capital Corporation, Citi, Credit Suisse, J.P. Morgan, Mizuho Securities and UBS were the joint bookrunners and lead managers for the transaction.

Ayala is organized as a holding company of the Ayala Group with a portfolio of core and emerging businesses. The Ayala Group is engaged in the following sectors: real estate, financial services, telecommunications, power, healthcare, logistics, water, industrial technologies, infrastructure, education and technology ventures.