Ayala Land, a Philippine property developer, has raised Ps12.2 billion ($298 million) from an enlarged top-up placement, after pricing the deal below the mid-point of the indicative price range. The company plans to use the proceeds primarily to fund its next phase of development.
The deal, which was anchored by domestic orders, was launched after 5pm Hong Kong time on Wednesday. The order books were covered within about an hour after the launch and closed at 9.30pm.
Strong demand led Ayala Land to increase the offering size by about 25% to 399.5 million shares, from the original plan for 320 million shares, it said in a statement filed to the SEC, adding that the placement was almost three times oversubscribed. Some of the shares in the offering came from its parent, Ayala Corporation, but all the proceeds will go to Ayala Land.
In addition to the anchor demand, the deal was also very well supported by global long-only and regional accounts, as well as some hedge funds, a source said yesterday. There were 80 investors in the book.
The placement comprised 399.5 million shares at Ps30.50 each, which represented a 7.2% discount to Wednesday’s close of Ps32.85, raising $298 million. The offer price also translated into a 3.6% discount to the five-day volume-weighted average price of the stock. It was marketed in a price range between Ps30 and Ps32, which represented a discount of about 2.6% to 8.7% to Wednesday’s close.
Ayala Corp said in a separate statement that its participation in the placement would reduce its holdings in Ayala Land to 49% from 50.4%, though it will retain control with more than 70% of the voting shares.
After the transaction, Ayala Land’s stock fell 5.6% to Ps31 yesterday, remaining above the offer price. As of Wednesday’s close, the stock had climbed about 24% since the start of the year. Ayala Corp’s stock was down 4.1% yesterday, while the benchmark PSEi Index declined 1.6%, paring its year-to-date gain to 15.7%.
Ayala Land said it has identified significant land banking opportunities amounting to about Ps20 billion, and has earmarked Ps46 billion for project completion as part of its Ps66 billion capital expenditure programme for 2013.
UBS was the sole bookrunner for the deal.
Ayala Land raised Ps13.6 billion ($323 million at the then exchange rate) from a similar top-up placement in July last year, which it planned to use for the acquisition of properties and assets. That deal also attracted strong demand and was upsized by about 28%, with the price fixed at a discount of 5% to the latest close.
Goldman Sachs, J.P. Morgan and UBS were joint bookrunners and placement agents for the 2012 deal, while BPI Capital was the sole domestic coordinator and bookrunner and CLSA was co-manager.
“This second round of equity placement will further provide Ayala Land the flexibility to pursue its growth plans as it continues to build a robust development pipeline moving forward,” Ayala Corporation President and CEO Jaime Augusto Zobel de Ayala wrote in the statement about the latest fundraising.
“We are delighted to assist Ayala Land in this transaction and once again encouraged by the support of the investing community.”
Rizal Commercial Banking
Another Philippine equity deal hit the market on Wednesday night.
A concurrent top-up and secondary placement in Rizal Commercial Banking Corporation (RCBC), a Philippine commercial bank, has raised a total of $150 million. The deal was launched at around 4pm Hong Kong time on Wednesday, and the books were closed about five hours later.
The company initially launched the deal as a top-up placement from Pan Malayan Management & Investment Corp (PMMIC), the principal shareholder in the bank, to raise $100 million. But after the deal drew good demand, another shareholder, a wholly-owned subsidiary of CVC Capital Partners, joined in to do a secondary placement and raised $50 million, a source said yesterday.
The top-up placement portion of the deal comprised 63.65 million shares for the fixed price of Ps64 each, which represented a 4.5% discount to Wednesday’s close, raising Rs4.07 million ($100 million). After the transaction, PMMIC’s stake in the bank is marginally reduced to 47.8% from 50.5%, RCBC said in a statement.
After the transaction, RCBC’s stock fell 3.1% to Ps64.9 yesterday, staying above the offer price. It has gained about 8.2% so far this year.
RCBC plans to use the proceeds in preparation for the new Basel III capital rules — to finance continued growth in its risk-weighted assets, to comply with the minimum core equity tier-1 capital guidelines and to strengthen and further broaden the bank’s capital base, according to a term sheet. The company said the transaction was also intended to promote a wider distribution of its common shares.
For the secondary placement portion, the seller was Hexagon Investments, which sold 31.8 million shares for Ps64 each, raising Ps2.04 billion ($50 million). Its stake in the bank is reduced to 11.6% from about 15% prior to the deal.
The deal drew strong demand from anchor investors, both foreign and domestic, and the deal was allocated largely to long-only investors, the source said, adding that domestic investors received 35% of the allocations. There were about 80 lines in the book, and it was multiple-times covered even on the upsized transaction, the person noted.
Credit Suisse, Deutsche Bank, Macquarie and Maybank ATR Kim Eng were joint bookrunners for the deal.
