Century Properties going back to local bond market to borrow P3B
Antonio family-led Century Properties Group Inc. (CPG) plans to return to the local bond market with an offering of as much as P3 billion worth of debt securities, locking in low-cost funds to retire costlier debt and fund expansion programs.
CPG has filed at the Securities and Exchange Commission (SEC) an application to raise as much as P6 billion from the sale of retail bonds to the investing public in the next three years.
The first tranche will consist of up to P3 billion worth of five-year bonds, with a base offer of P2 billion and an option to upsize by P1 billion in case of strong demand.
These new debt papers due 2027 are intended to be listed on local fixed income platform, Philippine Dealing & Exchange Corp. Chinabank Capital is the sole issue manager, lead underwriter and bookrunner.
Interest rates down
About P1 billion of the net proceeds would be used to settle maturing bonds carrying a 7.8203-percent interest rate by April 15 next year, based on the prospectus submitted to the SEC.
In 2019, CPG issued P3 billion worth of three-year bonds to fund the rollout of affordable housing and town home projects. Since then, local interest rates have gone down to record lows, creating an opportunity for corporate borrowers like CPG to replace older and costlier debt.
About P959 million of net proceeds would also be used for CPG’s capital expenditure for 2022. The budget includes funding for future horizontal and affordable housing development projects in Cavite and Bataan.
33 projects completed
If the overallotment option is exercised, the rest of the proceeds would be used to fund general corporate requirements.
As of end-September, CPG has completed 33 projects, namely: 29 residential projects, consisting of 17,169 units and an aggregate gross floor area of 1.32 million square meters. It has also developed a retail commercial building, a medical office building and two office buildings.
CPG has likewise completed 2,814 homes under its affordable housing segment. These are in addition to 19 buildings consisting of 4,128 units for a total of 548,262 sq m that had been completed prior to 2010 by the Meridien Group of Companies, the prior company of the founding principals. INQ
