8990 Holdings’ plan to issue bonds approved

The Securities and Exchange Commission has approved the plan of mass housing developer 8990 Holdings to offer to retail investors at least P5 billion worth of long-term bonds.

8990 Holdings was also given the leeway to upsize the bond offer by another P4 billion in case of strong demand and favorable pricing.

Based on a document released by the SEC on Monday, 8990’s fixed rate bonds will be offered to the public in three series.  Series A will mature in five years and three months or by 2020 unless otherwise redeemed by 8990.  Series B will mature in seven years or by 2022 while Series C will have a 10-year tenor.

The housing developer plans to list the bonds on fixed income trading platform Philippine Dealing & Exchange Corp.

Proceeds from the offering will be used to refinance existing debt of the issuer and its subsidiaries.

A fixed-rate borrowing over a long tenor is also seen eliminating the risk of interest rate fluctuations.

The bonds will be in scripless form and will be issued in minimum denominations of P50,000 each and additional investment in multiples of P10,000.  They can be traded in denominations of P10 million in the secondary market.

Mandated to act as joint issue managers are BDO Capital & Investment Corp., First Metro Investment Corp. (FMIC) and SB Capital Investment Corp.   The joint lead underwriters are BDO Capital, FMIC, SB Capital and China Banking Corp.

Based on an earlier statement, the offering targets institutional investors such as banks, retirement and pension funds, insurance companies, common trust funds and fixed income funds, as well as retail and high-net worth accounts.