AYALA LAND, INC. 31st Floor, Tower One, Ayala Triangle, Ayala Avenue, Makati City 1226 Telephone Number: (632) 848-5643 P252,000,000= 5.0% Bonds Issue Price: 100% of Face Value Ayala Land, Inc. (“Ayala Land” or the “Issuer” or the “Company”) is proposing to issue Bonds (the “Bonds”) in the aggregate principal amount of up to P252,000,000. The Bonds shall be issued monthly in a series for thirty six (36) months commencing on February 16, 2006, or such other date as may be agreed by the Issuer and the Issue Manager and Underwriter. All Series of the Bonds shall mature on the third anniversary of the Initial Issuer Date. Each series of the Bonds will bear interest on its principal amount from and including the Issue Date thereof, at a fixed rate of 5.0% per annum. Interest will not be compounded and shall be payable on Maturity Date, less the amount of any applicable withholding taxes. Each series of the Bonds will be represented by a certificate of indebtedness to be issued and registered in the name of Bank of the Philippine Islands – Asset Management and Trust Group as trustee for the Bondholders. The beneficial interests of each Bondholder in and to the Bonds or series thereof will be shown on and recorded in, and trading thereof will be effected through, the Register of Bondholders maintained by Standard Chartered Bank as registrar. The Bonds shall be issued and traded in denominations of P= 5,000 and in integral multiples thereof. Trading of the Bonds will be done over-the-counter. The Bonds shall be offered to the public (the “Offer”) at face value through the Underwriter named below subject to certain conditions in the Issue Management and Underwriting Agreement executed between the Issuer and the Issue Manager and Underwriter. Issue Manager and Underwriter BPI Capital Corporation THE DATE OF THIS PROSPECTUS IS JANUARY 18, 2006 THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THE P252,000,000 AYALA LAND HOMESTARTER BONDS OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE AND SHOULD BE REPORTED IMMEDIATELY TO THE SECURITIES AND EXCHANGE COMMISSION. This Offering is primarily targeted to benefit the low to middle-income market segment. Ayala Land’s objective is to encourage this segment to save sufficient funds to enable them to own real estate property in the future. To make the Bonds more affordable to the target market, it shall be issued in a series and the different series of the Bonds shall be issued against monthly payments by the Bondholders over a period of three (3) years. Since this is a debt issuance, holders of the Bonds shall not be entitled to any dividends from the Issuer. Ayala Land expects that the initial net proceeds of the Offering will amount to approximately P5,000,000= after fees and expenses. Thereafter, Ayala Land expects to receive approximately P7,000,000 a month over the next 35 months. Given the amount of the proceeds expected to be received by the Issuer on a monthly basis, such proceeds are not projected to pay for any specific transaction but instead shall be used by Ayala Land for general corporate purposes. For its services as Underwriter, BPI Capital will receive up to 2.0% of the aggregate issue amount. Such amount shall be inclusive of underwriting and selling fees. Ayala Land confirms that this Prospectus contains all information relating to the Bonds which is, in the context of the issue of the Bonds, material (including all information required by the applicable laws of the Republic of the Philippines). There are no other facts the omission of which would make any statement in this Prospectus misleading in any material respect. Ayala Land confirms that it has made all reasonable inquiries in respect of the information, data and analysis provided to it by its advisors and consultants or which is otherwise publicly available for inclusion into this Prospectus. Ayala Land, however, has not independently verified any such publicly available information, data or analysis. Neither the delivery of this Prospectus nor any sale made pursuant to the Offering shall, under any circumstance, create any implication that the information contained or referred to in this Prospectus is accurate as of any time subsequent to the date hereof. The Issue Manager/Underwriter does not make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this Prospectus. The contents of this Prospectus are not to be considered as legal, business or tax advice. Each prospective purchaser of the Bonds receiving a copy of this Prospectus acknowledges that he has not relied on the Issue Manager/Underwriter in his investigation of the accuracy of such information or in his investment decision. Prospective purchasers should consult their own counsel, accountants or other advisors as to legal, tax, business, financial and related aspects of the purchase of the Bonds. No dealer, salesman or other person has been authorized by Ayala Land and the Issue Manager/Underwriter to give any information or to make any representation concerning the Bonds other than as contained herein and, if given or made, any such other information or representation should not be relied upon as having been authorized by Ayala Land or the Issue Manager/Underwriter. ALL REGISTRATION REQUIREMENTS HAVE BEEN MET AND ALL INFORMATION CONTAINED HEREIN IS TRUE AND CURRENT. Jaime I. Ayala President SUBSCRIBED AND SWORN TO BEFORE ME this 18th day of January 2006, affiant exhibiting to me his Community Tax No. 24801716 issued at Makati City on January 10, 2006. Doc No. 276; Book No. 57; Page No. V; YAZMIN M. FACTORAN-ESTRELLA Series of 2006 Notary Public for Makati City Appt. # No. M-527 until 12-31-06; Roll # 42900 PTR # 9437591; 01/05/05 ; Makati City IBP 634058 ; 01/06/05 ; Makati City Tower One & Exchange Plaza, Ayala Tri. Ayala Ave., Makati City 1226 M. M, Phils. TABLE OF CONTENTS Page Forward-Looking Statements.................................................................................... 1 Definition of Terms.................................................................................................... 2 Executive Summary.................................................................................................. 6 Summary of the Offering.......................................................................................... 11 Risk Factors and Other Information.......................................................................... 18 Philippine Taxation……………………………………………………………………… 28 Use of Proceeds....................................................................................................... 31 Determination of Offering Price................................................................................. 32 Plan of Distribution.................................................................................................... 33 Description of Securities to be Registered............................................................... 35 Interests of Named Experts and Independent Counsel............................................ 55 Description of Business........................................................................................... 56 Description of Properties........................................................................................... 71 Certain Legal Proceedings........................................................................................ 74 Market Price of and Dividends on Ayala Land’s Common Equity and Related Stockholder Matters................................................... 75 Management’s Discussion and Analysis of Financial Condition and Results of Operations......................................................... 77 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............................................. 101 Directors, Executive Officers and Control Persons................................................... 104 Executive Compensation.......................................................................................... 111 Security Ownership of Management and Certain Record and Beneficial Owners… 114 Certain Relationships and Related Transactions..................................................... 116 Description of Certain Other Debt………………………………………………………. 118 Corporate Governance............................................................................................. 119 Financial Information ................................................................................................ 120 FORWARD-LOOKING STATEMENTS This Prospectus contains certain “forward-looking statements”. These forward-looking statements generally can be identified by use of statements that include words or phrases such as Ayala Land or its management “believes,” “expects,” “anticipates,” “intends,” “plans,” “foresees” or other words or phrases of similar import. Similarly, statements that describe Ayala Land’s objectives, plans or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from the expectations of Ayala Land include, among others: General Economic and Political Conditions • changes in Philippine and international interest rates • changes in political