Vista Land raises $225M for debt payments, capex

MANILA, Philippines - Listed property firm Vista Land & Lifescapes Inc. has completed its return to the bond market, raising $225 million in fresh capital to support debt payments and expansion projects.

The real estate unit of the Villar family said it generated $350 million of demand from 44 offshore and institutional investor accounts in the first dollar-denominated bond offering from a Philippines corporate in 2014.

“The success of the tender offer and new issue represents an important milestone for Vista Land in the active management of its capital structure,” Vista Land said.

“Most importantly, the exercise achieved the Vista Land’s objectives of reducing interest expense, further diversifying its funding sources and increasing funding from offshore investors,” it added.

In terms of geographic distribution, roughly 95 percent of the bonds were distributed in Asia and the rest was distributed in Europe.

By investor type, 60 percent of the bonds were distributed to banks, 28 percent to fund and asset managers, and 12 percent to private banks, Vista Land said.

“This enabled Vista Land to price the new five-year issuance at a yield of 7.625 percent, representing a 12.5 basis points tightening from initial guidance of 7.75 percent,” the property firm said.

The bonds of subsidiary VLL International Inc. will bear a fixed interest coupon of 7.45 percent per year, with interest payable semi-annually in arrears.

HSBC acted as sole global coordinator, and with DBS Bank Ltd., acted as joint bookrunners and joint lead managers on the bond issue. BDO Capital & Investment Corp. acted as domestic lead manager and domestic deal manager for the tender offer.

In contrast, Vista Land already paid $103.76 million worth of corporate notes that carry an interest rate of 8.25 percent ahead of maturity in line with efforts of lower the interest it pays to creditors.

The tender offer for a total of $150.34 million in outstanding notes is the first liability management transaction of a Philippine corporate in 2014, Vista Land said.

“The proceeds of the notes issue will be used to refinance the company’s existing indebtedness, partially finance its capital expenditures and for general corporate purposes,” Vista Land earlier said.

Vista Land allotted P21 billion for capital expenditures this year, up 22 percent from P17.2 billion in 2013.

The property firm will introduce to the market P28 billion worth of projects this year, two-thirds of which are under middle-income brand Camella Homes.

In 2013, the country’s largest homebuilder launched 35 projects with an estimated value of P26.1 billion, 31 of which are in the low and affordable segment.

Vista Land is the holding company of five business units: luxury brand Brittany, upper middle income segment Crown Asia, Camella Homes, Communities Philippines, condominium builder Vista Residences and socialized housing arm Lumina Homes.

In the past 38 years, the property firm has completed more than 250,000 housing units in 31 provinces and 64 cities and municipalities around the country.