Ayala Land sets homestarter bond sale

By Miguel R. Camus, BusinessMirror

Posted at Sep 11 2012 07:50 AM | Updated as of Sep 11 2012 03:50 PM

MANILA, Philippiens - Property giant Ayala Land Inc. (ALI) is seeking to sell the fifth series of its popular homestarter bonds starting late October, documents filed with the Securities and Exchange Commission showed on Monday.

Based on its preliminary prospectus, the builder is seeking to raise up to P3 billion from the current series of homestarter bonds, which matures in three years. The first tranche is valued at P2 billion and will be sold starting October 26, with the second tranche to be sold one year after.

The debt scheme serves the dual purpose of raising funds for the builder while getting bondholders to acquire ALI products by offering incentives.

ALI said the bonds will be offered at 100 percent of face value, and will pay a fixed-rate of 5 percent per annum until maturity. Buyers are required to subscribe to a minimum of P50,000 worth of homestarter bonds and up to a maximum of P5 million.

Since it is mainly aimed at boosting sales, the scheme gives bondholders the option to apply the principal amount of the bonds plus interest gained as full or partial downpayment for ALI-developed lots, houses or condominiums.

This option also grants buyers a so-called bonus credit equivalent to 10 percent of the aggregate principal amount of bonds held, ALI said in the prospectus.

Buyers that choose to forgo buying an ALI product can simply collect their principal and accrued interest by maturity.

ALI shares declined 2.83 percent to P22.30 each on Monday, giving the builder a market value of P306.7 billion.