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Yield Curve: A Study Essay

3331 words - 14 pages

Corporate Study about
Factors affecting the
Yield Curve and
Investment Decisions

Submitted by:
Siguenza, Kevin Loyd G.
Balingasa, Mirasol M.
Francisco, Jetty P.
Miral, Julius Emer D.
Ventura, Ma. Iris Angela T.

Submitted to:
Prof. Pabayos

I. Introduction
The financial market in the Philippines has been in a “rosy” state. It’s a good sign for the country’s economy, specifically the Philippines debt market. The proponents of the study have chosen matured or redeemed bonds of a Real Estate Corporations, namely Ayala Land Inc. and Filinvest Land Inc. According to CBRE Philippines, the leading real estate advisor in the Philippines, that real estate market in the ...view middle of the document...

Ayala Land was spun-off by Ayala Corporation in 1988 to enhance management focus on Ayala Corporation’s existing real estate business and to highlight the value of assets, management and capital structure of the real estate business. The SEC issued Ayala Land its certificate of incorporation on June 30, 1988. The Ayala Land shares were offered to the public in an initial public offering (“IPO”) of primary and secondary shares in 1991 and subsequently listed on the Makati and Manila Stock Exchanges (predecessors of the PSE). The IPO diluted Ayala Corporation’s effective interest in Ayala Land to 88.2%. Since then, Ayala Corporation’s effective interest has been further reduced to about 52.92% as of March 31, 2008 through, among others, the exercise of stock options by the respective employees of Ayala Corporation and Ayala Land, exchanges under Bonds due 1996 and Bonds due 2001, disposal of Ayala Land shares by Ayala Corporation and Ayala Land’s issuance of new shares in relation to its acquisition of interest in companies owning properties in Canlubang, Laguna in 1993. Further reduction of Ayala Corporation’s equity in Ayala Land has also been effected by the conversion to Ayala Land common B shares of the entire =P3 billion convertible Long Term Commercial Paper publicly issued by the Company in December 1994.As of March 31, 2008, equity attributable to equity holders of Ayala Land, Inc. amounted to =P47.6 billion. It is listed on the PSE with a market capitalization of =P140 billion as of March 31, 2008 based on Ayala Land’s common share closing price of =P10.75 as of that date.Ayala Land is the largest real estate conglomerate in the Philippines engaged principally in the planning, development, subdivision and marketing of large-scale communities having a mix of residential, commercial, leisure and other uses. Its principal businesses include planning and development of mixed-use properties, particularly, the subdivision and sale of high-end, middle income and affordable residential lots and housing units, leisure community development, commercial lots and the development industrial and business parks. Ayala Land, through its subsidiaries, also owns hotels and movie theatres, and provides property management and construction services to its own projects and to third parties for industrial building and government infrastructure projects.
The Company’s residential products are distributed to a wide range of clients through various sales groups. Ayala Land established a wholly-owned subsidiary, Ayala Land Sales, Inc. (ALSI), which exclusively markets and sells high-end properties and condominium projects developed by Ayala Land. Separate sales groups have also been formed for certain subsidiaries which cater to different market segments such as Community Innovations, Inc. (middle-income housing) and Avida Land Corporation (affordable housing). To complement these sales groups, Ayala Land and its subsidiaries also tap external brokers. Ayala...

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