UPDATE 1-Ayala Corp sells $300 mln worth of exchangeable bonds
* Proceeds to finance power, infrastructure ventures
* Says may consider more capital raising
* Group to spend record 187 bln pesos, up 46 pct from 2013 (Updates share price; adds company explanation on dilution and growth outlook, analyst comments)
MANILA, April 11 (Reuters) - Philippine conglomerate Ayala Corp has sold $300 million worth of five-year bonds exchangeable for common stock of its property unit Ayala Land Inc, sparking a fall in the subsidiary's share price on worries over dilution.
The country's oldest holding firm said it would consider raising more capital when market conditions allowed, and if it won infrastructure-related government contracts worth a total of over $2 billion next month.
The group plans to bid for a $1.4 billion project to operate and extend Manila's oldest light-rail transit line with partner Metro Pacific Investments Corp on May 28.
It also wants to bid with partners Aboitiz Land Inc and Macquarie Infrastructure Holdings (Philippines) Pte Limited for a $787 million project to build and operate an expressway southwest of the capital on May 21.
These are on top of its current portfolio of infrastructure projects, which along with its other businesses ranging from banking to electronics are expected to deliver record net income of over 20 billion pesos ($451.4 million) by 2016, or 56 percent higher than 2013 net profit, the group said.
The bonds, maturing on May 2, 2019, have interest of 0.50 percent, payable semiannually. They will be initially exchangeable at 36.48 pesos per Ayala Land share starting June 11.
"The bonds, which were offered to qualified institutional buyers, were 2.5 times oversubscribed," Fernando Zobel de Ayala, president and COO of Ayala Corp, told stockholders on Friday.
Shares of Ayala Land fell as much as 4.3 percent before paring their loses to around three percent in afternoon trade, on concerns over dilution of Ayala group's holdings in the country's top property firm after the bonds are exchanged.
"We're still going to be a very large shareholder and it will still account for a very large portion of our portfolio," Delfin Gonzalez Jr, company chief finance officer, told reporters.
He said the group's holdings in Ayala Land would drop to around 46.5 percent from 49 percent now if all bonds were fully exchanged into shares.
Part of the proceeds of the bonds will finance the group's commitment to invest $800 million in its power portfolio, of which only about half has been funded so far, Gonzalez said.
The group said it planned capital spending of a record 187 billion pesos this year, up 46 percent from 2013.
Sixty institutional investors participated in the bond sale, mainly from Asia and Europe, Gonzales said.
The company said starting May 2, 2017, bond-holders could ask for the bonds' repurchase at 100 percent of the principal amount. The conglomerate added it could call the bond should Ayala Land shares trade at at least 130 percent of the exchange price for 30 consecutive trading days.
The sole international book runner is Goldman Sachs International, and the domestic lead manager is BPI Capital Corp.
($1 = 44.305 Philippine Pesos) (Reporting by Siegfrid Alegado and Rosemarie Francisco; Editing by Stephen Coates)
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