Filinvest holding firm raising P10B via bond issue

MANILA, Philippines - Filinvest Development Corp. (FDC), the investment holding company of the Gotianun family, is tapping the capital markets anew to raise P10 billion in fresh funds.

The planned bond sale, which will finance various investments, has secured the highest credit score, said local credit rater Philippine Rating Services Corp. (PhilRatings).

“The proposed issuance is for P10 billion in fixed-rate bonds with a 10-year tenor. The proceeds will be used to fund the group’s various investments in real estate and power generation,” PhilRatings said.

PhilRatings rated the bond issue at PRS Aaa, signifying the highest quality with minimal credit risk.

“The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” PhilRatings said.

PhilRatings said the credit rating reflects FDC’s steady earnings and diversified business portfolio; maintenance of a good credit standing even in times of financial crisis; and strong financial flexibility.

“During the financial crisis in 1997, for example, FDC settled its financial obligations without undergoing any restructuring,”  PhilRatings said.

The agency also took note of FDC’s established brand names and good market position of main contributing subsidiaries; conservative and professional management stance; and new investments that will boost profitability in the medium-term.

A credit rating is essential prior to the issuance of bonds as it gives the public a gauge whether the offering is a sound investment instrument.

In March, FDC raised $300 million after its offshore unit Filinvest Development Cayman Islands sold seven-year bonds. It was FDC’s first international bond offering since the late 1990s.

FDC’s property arm (Filinvest Land Inc.) and banking unit (EastWest Banking Corp.) accounted for 51 percent and 39 percent of the group’s total revenues last year, respectively.

“Filinvest Land and EastWest Bank are expected to benefit significantly from the growing economy of the Philippines,” PhilRatings said.

The holding firm is also into sugar (Pacific Sugar Holdings), hotel (Crimson Resort and Spa at Seascapes Resort Town in Cebu) and power generation (FDC Utilities Inc.).