Federal Land raises P5 B through debt notes

George Ty. File photo

MANILA, Philippines—Federal Land Inc., the property arm of the group of tycoon George Ty, has raised P5 billion from the sale of debt papers to selected institutional investors.

The Tys’ conglomerate GT Capital Holdings Inc. disclosed to the Philippine Stock Exchange on Friday the signing of a corporate notes agreement with a syndicate of institutional lenders composed of banks, insurance companies, pension funds and trust institutions.

The notes have a tenor of seven and 10 years and carry a fixed rate. The issue was upsized from the base offer of P3 billion due to strong institutional demand, GT Capital said.

Federal Land intends to use proceeds from this issuance to fund ongoing projects, boost working capital and for general corporate purposes.

“The timing of this debt raising is excellent, as it enables Federal Land to capitalize on robust real estate demand fueled by the strong economic wave currently enjoyed by our country,” said Federal Land president Arthur Ty. “Against the backdrop of a strong economy, we have maintained a steady surge in market demand for our high-end, middle-end and affordable projects, from the western part of Metro Manila to the eastern section. We remain thankful to all our customers.”

Ty said Federal Land’s fundamentals remained sound and assured the investing public that the property firm was “committed to maintain this course.”

This is Federal Land’s second foray into the capital market through the issuance of corporate notes. It first issued a similar instrument in April 2011 worth P6.6 billion. In both issues, the Metrobank group’s investment banking arm First Metro Investment Corp. acted as sole arranger and bookrunner.

Unlike retail bonds, which are sold through a public offering and must go through a more tedious regulatory approval process, corporate notes are a quicker fund-raising option for top-tier corporations as they are sold to no more than 19 selected institutional investors.

Federal Land, which is 100-percent owned by GT Capital, is one of the country’s largest property developers with a focus on the residential segment over the last 40 years. It is also involved in commercial developments and master-planned communities.

The Tys’ property arm currently has 30 ongoing projects in various stages of completion. Some of its notable projects include the Grand Hyatt Residences and Parkwest in Fort Bonifacio, Marco Polo Residences in Cebu, The Grade Midori in Makati, Bay Residences in Pasay and the Capital Towers in Quezon City.

Its key integrated township projects include the Veritown Fort, projects in Metropolitan Park and Tropicana Garden City.