Century Property taps P4.2B in dual currency loan
MANILA, Philippines—Property developer Century Property Group has tapped a dual-currency term loan facility worth P4.2 billion to curb borrowing cost and boost funding for its residential projects.
The facility has a five-year tenor and British bank Standard Chartered was named lead arranger and bookrunner for the deal, CPG said in a disclosure to the Philippine Stock Exchange on Tuesday.
“The secured term loan facility accomplishes few milestones for CPG,” said the company’s chief finance officer Jose Carlo Antonio, citing the lowering of CPG’s cost of debt and securing the working capital needs of seven pre-sold projects slated for turnover in 2015 to 2017.
“It provides CPG financial flexibility by allowing profits from completed and soon to be completed projects, as well as funds raised from CPG’s recent equity placement, to embark on growth opportunities to enhance shareholder value,” Antonio said.
Antonio said the facility would carry an interest rate based on three-month PDST plus 4 percent or based on the Bangko Sentral ng Pilipinas’ overnight borrowing rate plus 2 percent, whichever was higher. “This will significantly bring down CPG’s financing costs,” he said.
Proceeds from the transaction will cover construction and land costs, general expenditure and financing costs of seven buildings across three project developments of CPG, the firm said in the disclosure.
A dual-currency loan usually carries a currency conversion mechanism. This means CPG’s lenders have the right to change the currency borrowed for a fixed period and at a fixed exchange rate.