8990 plans P5B perpetual offering

Leading mass housing developer 8990 Holdings plans to raise P5 billion from an offering of perpetual preferred shares.

In a disclosure to the Philippine Stock Exchange on Friday, 8990 Holdings said its board of directors had approved the offering and issuance of 50 million non-voting, non-convertible, non-participating and redeemable preferred shares at an offer price of P100 per share.

The dividend rate for the offer will be subject to confirmation of the board once the offering has been finalized, the disclosure said.

Preferred stocks receive priority over common stockholders in the payment of dividends and the liquidation of assets. But unlike holders of common stock, investors do not benefit from earnings that exceed the dividend.

A perpetual preferred stock has no maturity date and dividends are paid indefinitely. However, the issuer usually carries the option to redeem the instruments under specific terms, thus giving the instrument synthetic maturity on which yields will be based. Typically, perpetual instruments are listed on an exchange, giving these instruments trading liquidity.