Filinvest Land raises P5 billion via fixed-rate bonds

MANILA, Philippines - Filinvest Land Inc., (FLI) the property development unit of the Gotianun family, successfully raised P5 billion from the issuance of three-year and five-year fixed-rate bonds, the company said yesterday.

In a disclosure to the Philippine Stock Exchange, FLI said the bonds were three times oversubscribed and would be listed on the fixed-income exchange or the Philippine Dealing Exchange Corp. (PDEX).

Of the P5-billion, P500 million are three-year bonds at a fixed rate of 7.5269 percent and P2.5 billion in five-year bonds at 8.4615 percent, inclusive of the P2-billion oversubscription option.

The bond issue was assigned the highest rating of PRS Aaa by the Philippine Rating Services Corp., indicating that the borrower’s capacity to meet its financial commitments is extremely strong.

In assigning the rating, PhilRatings took into account FLI’s improving net cash position; its diversified portfolio; resilience as enhanced by its continued focus on the mass housing segment; the steady growth in its real estate and leasing operations; its sound debt position and strong financial flexibility; and favorable industry conditions.

BPI Capital Corp., BDO Capital and Investment Corp. and First Metro Investment Corp. acted as joint lead managers and underwriters for the issue.

FLI has set aside P2.3 billion out of the expected total proceeds from the offering for the construction of various medium-rise buildings (MRBs) in Metro Manila, Cebu and Davao and a high-rise building in Makati. Another P2 billion will go to the development of various mass housing projects.

The remaining P700 million will be used to expand its landbank – P270 million for the South Roads project in Cebu, P124 million for a property in Ortigas, P143 million for a property in Cebu, and P163 million for a property in Sta. Mesa, Manila. These properties will be developed into MRBs.

From 2009 to 2016, FLI expects to register continued growth in revenues, primarily driven by its affordable and middle-income segments. In the first half this year, the company posted a net income of P759 million or 6.27 percent higher than the previous level. Total revenues rose 9.7 percent to P2.16 billion on the back of higher real estate sales and rental revenues.

FLI has set a P5.3-billion capital budget this year, up 29 percent from the P4.1-billion spent in 2008.

The company is rolling out 29 new projects and phases this year, estimated to generate P7.4 billion in sales across all market segments.

It plans to launch more phases in its ongoing mid-rise projects in Ortigas Extension and Marcos Highway in Pasig City, as well as in Davao and Cebu.

It will also launch a similar project in Sta. Mesa, Manila.

For its socialized housing projects, the company is readying new projects within Ciudad de Calamba as well as new phases in existing projects in Batangas, Cavite, Tarlac and Pampanga.