FDC raises $300M from bond issue

Gotianun-led conglomerate Filinvest Development Corp. has debuted into the offshore bond market with a warmly accepted $300-million bond deal that marked a new low in terms of borrowing cost for a Philippine corporate issuer for this tenor.

FDC, through unit Filinvest Development Cayman Islands, sold seven-year bonds at 4.25 percent a year and priced the issuance at par.

“It was a landmark issuance especially since it was FDC’s inaugural bond issue in the international debt markets,” said Lauro Baja, managing director at UBS Philippines, which acted as the sole global coordinator.

UBS and HSBC acted as joint bookrunners for the debt issue, which generated an order of $1.4 billion from 70 investors. “Bookbuild lasted for only eight hours,” Baja said.

Asia accounted for 92 percent of the debt deal while Europe got 8 percent, Baja said.

“At 4.25-percent, FDC was able to achieve the lowest coupon for a Philippine corporate issuer,” Baja said, noting that the initial guidance was at 4.5 percent but was eventually lowered after significant subscriptions.

Despite the uncertainty regarding the Cyprus bailout package, the transaction drew strong momentum at the opening with order books being oversubscribed within 30 minutes of announcement, said Wick Veloso, chief executive officer at HSBC Philippines.

“We congratulate the management team of FDC, one of country’s leading conglomerates, for a successful debut issuance in the offshore market,” Veloso said. “This is a testament to the confidence in FDC’s track record of growing into one of the Philippines’ largest and most respected business groups.”

FDC grew its net profit last year by 10 percent to P4.06 billion on higher earnings from real estate, banking, hotel and sugar operations. FDC ended last year with P239.37 billion in resources.

Its real estate operating units include publicly listed Filinvest Land Inc. for residential property development. It is also into commercial property development through Filinvest Alabang Inc., Festival Supermall Inc., Cyberzone Properties Inc. and Filinvest Asia Corp. for commercial property development.

Its involvement in banking and financial services is through East West Banking Corp. and FDC Forex Corp., while the sugar farming and milling businesses are handled by Pacific Sugar Holdings Corp., Davao Sugar Central Co. Inc., Cotabato Sugar Central Co. and High Yield Sugar Farms Corp. In the hospitality business, Seascapes Resort Inc., Filarchipelago Hospitality Inc. and Filinvest Hotels Corp. are its operating units. Doris C. Dumlao