CLI’s P8-B bond sale a go despite challenging environment

Cebu Landmasters Inc. (CLI) will push through with a maiden bond sale of up to P8 billion as it remains undeterred by challenging conditions in the capital markets.

The Visayas and Mindanao-focused builder will use proceeds from the debt offer to accelerate the development of township projects in Davao and Cagayan de Oro, which continue to enjoy brisk sales.

CLI said on Tuesday the proposed bond sale was assigned a credit score of “PRS Aa” by Philippine Rating Services Corp. This suggests a very low risk of default.

The company did not provide details on the bond terms. It earlier announced plans to launch the sale in the third quarter of the year, while indicative tenors would range from 3.5 years to seven years.

CLI joins other firms issuing bonds such as Bank of Commerce, which is in the midst of a P3-billion debt securities sale, and AC Energy Corp., which recently approved a P10-billion bond offer.

Proceeds from bond sale will fund CLI’s Davao Global project and the 14-hectare Manressa town in Cagayan de Oro.

Funds will also be used for the development of the 100-hectare Minglanilla Techno-Business Park, its first reclamation project in Cebu.

The property developer will issue the bonds from its P15-billion long-term debt program that was registered with the Securities and Exchange Commission. BPI Capital Corp. and China Bank Capital Corp. act as the joint issue managers, joint lead underwriters and joint lead bookrunners.

The regional debt market has taken a beating the past month as overseas investors dumped Asian bonds amid a surge in US yields and the stronger US dollar.

Owned by the Soberano family, Cebu Landmasters hopes to lure investors with its strategy that focuses on tapping demand for affordable homes in markets outside Luzon.

CLI chair and CEO Jose Soberano III signaled to investors last May that the builder remained bullish on prospects for the rest of 2022. “We remain ready to make the most of opportunities presented by the fast recovering VisMin economy,” he said. INQ