CLI eyes P5 billion from sustainability-linked bonds

MANILA, Philippines —  Cebu Landmasters Inc. (CLI), a listed property developer focused on the Visayas and Mindanao regions, is targeting to raise as much as P5 billion from the issuance of sustainability-linked bonds.

The bond issue, which will amount to P3 billion with an oversubscription option of up to P2 billion, will be used to refinance the company’s maturing obligations next year as well as for other general corporate purposes.

The issuance is the second tranche of the company’s three-year shelf registration program amounting to P15 billion.

Philippine Rating Services Corp. (PhilRatings) has assigned the proposed sustainability-linked bonds an issue credit rating of PRS Aa plus, with a Stable Outlook.

It has likewise maintained its Issue Credit Rating of PRS Aa plus, with a Stable Outlook, for both the company’s outstanding bond issuances of P5 billion and outstanding Series A to C corporate notes of P5 billion.

According to PhilRatings, obligations rated PRS Aa are of high quality and are subject to very low credit risk.

“The rating assigned to the proposed sustainability-linked bonds is mainly in relation to the company’s capacity to pay the rated bonds and is not an opinion on the attainability or capability to achieve the sustainability targets linked with the bonds,” PhilRatings said.

In relation to the proposed bonds, PhilRatings said CLI’s sustainability performance targets include building 8,500 cumulative affordable homes by the first quarter of 2027 and 16,000 cumulative affordable homes by the first quarter of 2029.

CLI is a developer of residential condominium units, subdivision houses and lots, townhouses, hotels, office projects and retail spaces.

The company had a total of 124 projects in different stages of development across 17 key cities in the Visayas and Mindanao regions as of end September.

From January to September, CLI launched P8.2 billion worth of projects with 1,664 residential units, a balanced mix of 57 percent targeted for the mid-market segment and 32 percent for the economic segment.

CLI said its focus on regional expansion, diverse housing solutions and a robust project pipeline solidify its leadership in the Visayas and Mindanao’s real estate market, with potential for growth in Luzon.

“CLI operates in a highly competitive market, facing strong competition from local and national players that are also expanding in the VisMin regions, particularly Cebu. These players may possess substantial capital and extensive landholdings in the area,” PhilRatings said.

“Nevertheless, CLI’s extensive familiarity in the VisMin markets attracts possible joint ventures (JVs) with landowners and offers for property acquisitions. CLI’s track record of successful JVs underscores its ability to work effectively with its JV partners,” it said.