CLI raises P5B for goal to address housing gap

Cebu Landmasters Inc.

MANILA, Philippines – Cebu Landmasters Inc. (CLI) has raised P5 billion from a “green bond” offering, which it would use to help address a housing gap in the Visayas and Mindanao.

Jose Franco Soberano, CLI president and chief operating officer, on Friday said proceeds from the offer, which is only the country’s second sustainability-linked bond, would be used to build 16,000 affordable housing units in the developer’s two main markets by February 2029.

READ: CLI starts P5-B green bond issuance

“Of those 16,000, there are some already under construction, some that will be launching, so we’re very confident of [reaching] that goal,” Soberano said during a media briefing.

The issuance consists of three-year series D bonds that carry a rate of 6.6348 percent and five-year series E bonds at a rate of 6.9157 percent annually. It represents the second tranche of CLI’s P15-billion shelf-registration program.

According to CLI chief financial officer Grant Cheng, they are considering a sustainability-linked issuance for the remaining P5 billion, especially since the company saw high demand for this listing.

The offer, which was listed on the Philippine Dealing and Exchange Corp. on Friday, was thrice oversubscribed, Cheng said.

Unlike regular bond offers, proceeds from green bonds need to be used to address specific United Nations Sustainable Development Goals. If the issuer fails to meet its sustainability targets within a specified period, the interest rate increases.

Access to affordable housing

In CLI’s case, it wants to increase access to affordable housing, or those priced at P2.5 million to P3.5 million each.

The Visayas and Mindanao-focused developer will need to reach the halfway point of its goal, or 8,500 homes, by February 2027.

If this target is unmet, the interest rates will increase by 7.5 basis points. The same goes for the end goal of 16,000 units.

“It’s a really nice feature of the bond because we are really committed to achieve that sustainability target,” Cheng said.

As it stands, CLI has the capacity to build up to 8,000 units a year, the CFO noted.

CLI’s sustainability-linked bond issuance is the second of its kind in the country after Ayala Land Inc., which raised P6 billion in July last year.