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Ayala Corp. issues ‘Class B’ Preferred Shares (2013)




One of the country’s largest conglomerates, Ayala Corporation (AC), is set to raise up to P10 billion through the issuance of Class B Preferred Shares.

Ayala Corp. announced it is issuing 20 million Class B Preferred Shares at a maximum price of P500 per share. The offering period runs from November 4 to 8.

Dividend Rate

The shares will pay a dividend rate based on the 10-year local interest benchmark PDST-R2 plus a spread of 1.25 to 2%. This translates to an indicative interest rate range of 4.75 to 5.5% per year based on the current 10-year PDST-R2 rate of 3.5%.

Use of Proceeds

Proceeds of the issuance will be used to buy back previously issued Class A Preferred Shares and to pay US dollar-denominated debt due in the last quarter of 2013.

Features of the Preferred Shares

Other features of the Class B Preferred Shares to be issued by AC are the following:

  • Non-voting. Owners of the preferred shares will not have the right to vote, unlike Ayala Corp.’s regular common stockholders.
  • Non-convertible. The shares cannot be converted to common stocks.
  • Cumulative. Dividends are cumulative, meaning, if the AC board of directors did not announce the dividend distribution for the year, dividends will accrue and will have to be paid in succeeding years.
  • Callable. The shares are redeemable by Ayala Corp. on the 10th and 15th year. If not redeemed, the dividend rate will be adjusted upwards.

Underwriters

A unit of Ayala Corp., BPI Capital Corp. will be the issue manager and lead underwriter. Other joint lead underwriters include BDO Capital Corp., First Metro Investment Corp., ING Bank, RCBC Capital Corp., HSBC, SB Capital Investment Corp. and Standard Chartered Bank.

More information about Preferred Shares and other Investments:







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