MANILA - Property giant Ayala Land Inc. is issuing P504 million worth of fixed-rate bonds in October as it positions itself for the full recovery of the real estate sector.

In a filing with the Securities and Exchange Commission, Ayala Land said it would launch the second tranche of its 'homestarter" bond offering, a program which aims to encourage low to middle-income families to save funds to be able to buy properties in the future.

Ayala Land said its homestarter bonds would carry a fixed rate of 5% per annum and would mature in 3 years.

The property firm noted that the interest gives prospective investors a chance to earn a yield significantly higher than those paid by traditional savings and time deposit accounts.

At the same time, bond holders will have the option to use proceeds as partial or full payment for an Ayala Land property.

"To make the bonds affordable to the target market, they shall be issued in a series and the different series of the bonds shall be issued against monthly payments by the bond holders over a period of 36 months," Ayala Land said.

Ayala Land has tapped BPI Capital Corp. to be the underwriter for the bond offer.

The company earlier said that buyers have returned to the property market, indicating it is on its way to recovery.

For this year, Ayala Land intends to launch 2,000 residential units.

It also plans to aggressively expand its shopping centers and it targeting to have more than 1 million in gross leasable area by 2011. Among the shopping malls in the pipepline are MarQuee Mall in Angeles, Pampanga and Davao Mall, which together will contribute an additional 130,000 square meters of leasable area.