8990’s follow-on offering yields P3.7B in fresh funds

Mass housing developer 8990 Holdings has raised P3.7 billion in fresh funds from a follow-on public offering of preferred shares which were listed on the Philippine Stock Exchange.

Proceeds from this exercise will be used to retire older debt and fund construction activities of housing projects.

In his speech during the listing of 8990 Holdings’ preferred shares on Wednesday, Philippine Stock Exchange president Ramon Monzon cited the company’s growth story and expansion plans.

“I am optimistic that with 8990’s strategy of growing its reach, diversifying its product offerings and exploring innovative financing products, the company will be able to help more Filipinos have homes they can call their own,” he said.

8990 Holdings’ series B preferred shares carried a dividend yield of 5.5 percent a year. The dividend yield was based on a three-year benchmark tenor, equivalent to the synthetic maturity of the bonds. If the preferred shares were not redeemed in three years, the dividend rate will be adjusted based on a step-up rate.

China Bank Capital acted as the sole issue manager, lead underwriter and sole bookrunner for this transaction.

The preferred shares form part of the shelf-registered securities of 8990 Holdings covered by the shelf registration approved by the Securities and Exchange Commission in 2017.

Since the issuance of 8990 Holdings’ series A preferred shares, it has purchased 18.18 hectares (ha) of raw land, valued at about P861.4 million, bringing the total land bank to around 465.7 ha as of end-September 2020.

The present land bank will be enough to build an estimated 150,000 housing units with gross selling value of P205 billion, based on the prospectus.

8990 Holdings is currently valued by the stock market at close to P42 billion. —Doris Dumlao-Abadilla