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Press Releases

3

August 2004

AYALA DISCLOSES P5 BILLION BOND OFFERING

Ayala Corporation intends to file a registration statement with the Securities and Exchange Commission (SEC) for a Peso Five Billion fixed-rate 5-year bond offering. The issue will be rated by domestic credit ratings agency Philratings, an affiliate of Standard and Poor.

The proceeds of the issue will be used to refinance the Company’s future maturing debt obligations, a portion of which is denominated in foreign currency. Ayala’s decision to raise Peso-denominated funding is consistent with the Company’s strategy to shift a greater proportion of its borrowings to the local currency. It is also the Company’s way of contributing to the development of the domestic capital market by providing an investment option to local investors of significant size.

While Ayala is already seeking approval from the SEC, the Company retains the flexibility to launch the bond at the time when it feels the market is most receptive and favorable for a Peso issuance of this size. With close to P6.0 Bn in cash at the parent level and USD140.0 Mn in undrawn, committed credit facilities established by various financial institutions, the Company can adequately cover its maturing obligations up to next year. As such, the Company continues to be opportunistic in its fund-raising activities, enabling it to time the actual issuance when the conditions are favorable for one.

Ayala has mandated BDO Capital & Investment Corporation, BPI Capital Corporation, First Metro Investment Corporation, ING Bank, Land Bank of the Philippines, PCI Capital Corporation and Standard Chartered Bank as the Issue Managers for the bond offering.

Ayala Corporation also signed a P2.7 Bn Note Facility Agreement with a lending consortium to be funded by Banco de Oro Universal Bank‚ Trust Banking Department, Bank of the Philippine Islands, China Banking Corporation, Equitable PCI Bank Trust Banking Group, First Metro Investment Corporation, and Land Bank of the Philippines. This short- term, stand-by facility will provide the Company with additional capability in addressing its future liquidity and funding requirements and flexibility in timing the peso bond issue.