Cebu Landmasters raises P5B from maiden bond sale

The Soberano family-led Cebu Landmasters Inc. (CLI) raised P5 billion from its first-ever bond sale, arming the builder with fresh funds to expand in its core markets in the Visayas and Mindanao.

The bonds were listed on the Philippine Dealing and Exchange Corp. on Friday, the property developer said in a stock exchange filing.

“CLI’s growth has been closely tied with serving the strong underserved demand for middle-class housing in VisMin,” CLI chair and Ceo Jose Soberano III said.

“We will continue to lean on that strength as we build out sustainable and vibrant townships in the region. We will further count on these communities of the future to propel the firm further,” he added.

The bonds were earlier rated Aa plus with a stable outlook by Philippine Rating Services Corp., signaling a low level of credit risk.

CLI earlier set the annual interest rates for the notes at 6.4222 percent of the Series A 3.5 year bonds, 6.9884 percent for the Series B 5.5 year bonds and 7.3649 percent for the Series C seven-year bonds.

BPI Capital Corp. and China Bank Capital Corp. arranged the sale as joint issue managers, joint lead underwriters and joint bookrunners while PNB Capital and Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp. acted as co-lead underwriters.

The developer said the notes, taken from a long-term bond program worth P15 billion, would be used to “further fuel the company’s growth momentum” as the government pursues new infrastructure projects to spur development in the VisMin regions.

“As new airports and other major infrastructure come onstream to unlock VisMin’s vast potential, CLI’s developments and estates will serve as catalysts for sustained growth and development,” Soberano said.

Earlier, CLI chief operating officer Jose Franco Soberano said capital expenditures for the year would reach P13 billion.

Investments in the fist half mostly went to project development activities while 22 percent was spent on land purchases, including a 17-hectare site in Butuan City.

The builder’s affordable housing brand, Casa Mira, continued to be the company’s primary sales driver.

In the first half of 2022, CLI said net income jumped 40 percent to a record P1.55 billion while real estate sales reached P7.36 billion, up 45 percent from the same period in 2021.

Gross profit margin was maintained at 45 percent despite cost pressures from the steep rise in raw material prices and other inputs.