Ayala Land Plans $1.3 Billion Debt, to Focus on High-End Homes
(Bloomberg) -- Ayala Land Inc. is looking at fresh borrowings of up to 75 billion pesos ($1.3 billion) this year as the Philippines' top property developer plans to continue pushing expensive homes amid still elevated interest rates.
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Short-term mortgage rate needs to drop by as much as 75 basis points from 6.5%-6.75% currently 'to really encourage the core market to come back,' Chief Financial Officer Augusto Bengzon said in a briefing on Thursday, referring to its main middle income market wherein many seek loans to buy property.
'We are going to lean on the premium segment for as long as interest rates remain fairly high,' Bengzon said. High-end buyers usually pay in full and last year, the company said sales from premium brands Ayala Land Premier and Alveo jumped 25% to 80.8 billion pesos, accounting for 64% of sales.
Low interest rates, high remittances from the nation's over 10 million citizens living abroad and an outsourcing industry that generates billions of dollars in revenue had in the past driven demand for home purchases.
About 70% of new residential projects that Ayala Land plans to offer this year will cater to high-end buyers and 30% to middle income earners, President Anna Ma. Margarita Bautista-Dy said. The developer expects to launch 80 billion pesos worth of residential projects for 2025, she said.
The unit of the Philippines' oldest conglomerate Ayala Corp. reported its 2024 net income rose 15% to 28.2 billion pesos, driven by higher residential sales. It earlier announced a target to expand its profit at double the annual growth rate of the country's gross domestic product in the next five years.
Shares of the property firm slid as much as 9%, the largest decline in nearly five years. Investors took profits after the stock's two-day spike despite its good earnings report, said Raoul Santos, president of RCBC Securities.
Ayala Land said in a separate stock-exchange filing that it plans to sell up to 75 billion pesos of retail bonds, corporate notes or bilateral term loans this year to partly fund general corporate requirements and pay maturing debt.
The company has 25 billion pesos in maturing debt that it plans to refinance locally this year. It may raise another 30 billion pesos in bonds for capital spending, Bengzon said.
Ayala Land has set a capital expenditure budget of 95 billion pesos for 2025, the highest since 2019. 'We are very cautious going forward but still we have quite aggressive plans,' Dy said.
(Updates with comments from company executives and analyst.)
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The Hill
33 minutes ago
- The Hill
Trump clears path for Nippon Steel investment in US Steel, so long as it fits the government's terms
WASHINGTON (AP) — President Donald Trump on Friday signed an executive order paving the way for a Nippon Steel investment in U.S. Steel, so long as the Japanese company complies with a 'national security agreement' submitted by the federal government. Trump's order didn't detail the terms of the national security agreement. But U.S. Steel and Nippon Steel said in a joint statement that the agreement stipulates that approximately $11 billion in new investments will be made by 2028 and includes giving the U.S. government a 'golden share' — essentially veto power to ensure the country's national security interests are protected. 'We thank President Trump and his Administration for their bold leadership and strong support for our historic partnership,' the two companies said. 'This partnership will bring a massive investment that will support our communities and families for generations to come. We look forward to putting our commitments into action to make American steelmaking and manufacturing great again.' The companies have completed a U.S. Department of Justice review and received all necessary regulatory approvals, the statement said. 'The partnership is expected to be finalized promptly,' the statement said. The companies offered few details on how the golden share would work and what investments would be made. Trump said Thursday that he would as president have 'total control' of what U.S. Steel did as part of the investment. Trump said then that the deal would preserve '51% ownership by Americans.' The Japan-based steelmaker had been offering nearly $15 billion to purchase the Pittsburgh-based U.S. Steel in a merger that had been delayed on national security concerns starting during Joe Biden's presidency. Trump opposed the purchase while campaigning for the White House, yet he expressed optimism in working out an arrangement once in office. 'We have a golden share, which I control,' said Trump, although it was unclear what he meant by suggesting that the federal government would determine what U.S. Steel does as a company. Trump added that he was 'a little concerned' about what presidents other than him would do with their golden share, 'but that gives you total control.' Still, Nippon Steel has never said it was backing off its bid to buy and control U.S. Steel as a wholly owned subsidiary. The proposed merger had been under review by the Committee on Foreign Investment in the United States, or CFIUS, during the Trump and Biden administrations. The order signed Friday by Trump said the CFIUS review provided 'credible evidence' that Nippon Steel 'might take action that threatens to impair the national security of the United States,' but such risks might be 'adequately mitigated' by approving the proposed national security agreement. The order doesn't detail the perceived national security risk and only provides a timeline for the national security agreement. The White House declined to provide details on the terms of the agreement. The order said the draft agreement was submitted to U.S. Steel and Nippon Steel on Friday. The two companies must successfully execute the agreement as decided by the Treasury Department and other federal agencies that are part CFIUS by the closing date of the transaction. Trump reserves the authority to issue further actions regarding the investment as part of the order he signed on Friday. ___ Associated Press writer Marc Levy in Harrisburg, Pa., contributed to this report.
Miami Herald
38 minutes ago
- Miami Herald
Why the US is stronger than you think – and what that means for a world on edge
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Image source: Eric Tompkins on Unsplash Before reports emerged of Israeli strikes on Iran's nuclear and military sites, Bremmer said the U.S. was strategically using leverage to push Iran toward a nuclear enrichment deal – a key priority for President Trump. Bremmer noted Iran's weakened position, citing setbacks involving Hezbollah, Bashar al-Assad, and Hamas, along with Gulf States' support for a deal, as factors making an agreement more likely. He acknowledged the possibility of Israeli military action if Iran delays but maintained that a deal remains the expected outcome. Trump's recent warning of "even more brutal" attacks if Iran refuses a deal may further increase pressure on Tehran. According to Bremmer, Trump's success stems from identifying "exactly what the pain points are for the bulk of the American population: ending wars, achieving fair trade, and securing borders. "His positions on these issues," Bremmer said, "are more popular than the Democrats." 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It is "inconceivable," said Bremmer, for the U.S. to return to being a manufacturing economy as it once was. "The U.S. is not a manufacturing economy anymore," he said. Any new manufacturing will be driven by robotics, automation, and AI, requiring far fewer workers, which could ironically put more pressure on existing manufacturing labor. This shift is part of broader "incoherent, angry, anxious" movements that will focus on economic displacement. Bremmer suggested that likelihood of war in the near term is "very low." China aims to appear "more responsible and more stable" while the U.S. undermines its own allies. However, China will continue to squeeze Taiwan's leadership with military exercises and economic sanctions, said Bremmer. This remains a long-term concern, but not for the immediate future. Bremmer stated definitively that Trump has never said he will run again and is not running again, despite media questions. Bremmer also believes Elon Musk understands he "damaged his interests" by fighting with Trump, and "that getting into a long-term fight with Trump was unsustainable." And Musk, according to Bremmer, is expected to support Trump's political goals and candidates in the midterms. The Democratic Party is not expected to settle on a coherent platform until closer to 2028 due to a broad range of views among potential leaders, according to Bremmer. And the midterm elections will be a decision about Trump. While Trump is currently doing well on immigration and the economy, his economic standing is expected to weaken over the summer due to trade issues, said Bremmer. What's more, a much stronger push to the economic populist left is anticipated, a phenomenon not seen since the post-Gilded Age. According to Bremmer, current populism from the right is driven by disaffected industrial working-class men in former industrialized places like Appalachia, the Rust Belt, and former East Germany, focusing on manufacturing and anti-immigrant sentiment. Bremmer predicts an enormous spike of populism from the left in the next electoral cycle, driven by college-educated, urban, white-collar professionals losing jobs due to AI. This movement, he said, will be more progressive on cultural issues but strongly opposed to the "deep state," major corporations, banks, and technology companies. Got questions about retirement, email Stagflation Risks: Shield Your Retirement Portfolio The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Axios
an hour ago
- Axios
Trump clears U.S. Steel-Nippon deal, terms still up in the air
U.S. Steel and Nippon Steel said Friday they have entered into a security agreement with the U.S. government, as President Trump signed an executive order allowing their proposed partnership to proceed. Why it matters: It's a major hurdle cleared toward the two companies' eventual combination, though the exact structure of the deal still remains mostly unclear. Catch up quick: The two companies issued a statement late Friday confirming a National Security Agreement that includes $11 billion in investment commitments by 2028, as well as a "Golden Share" for the U.S. government. "With those approvals, all necessary regulatory approvals for the partnership have now been received, and the partnership is expected to be finalized promptly," the companies said. Yes, but: It's still not clear how much Nippon Steel is paying for U.S. Steel, or what the final entity will look like. U.S. Steel shares rose 5% in after-hours trading late Friday to nearly $55, the original price the Japanese company agreed to pay before President Biden blocked the transaction in early January. The intrigue: At a rally in Pennsylvania last month, Trump said Nippon would be investing $14 billion as part of a deal.
