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 yesterday the signing of a corporate note 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 general corporate purposes.
Arthur Ty, president of Federal Land, said: “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.”
“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.
Ty also noted that Federal Land’s fundamentals remained sound and assured that the property firm was “committed to maintain this course.”
This marks 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.