FLI plan to offer retail bonds OKd

The Securities and Exchange Commission has approved a plan of Gotianun-led property developer Filinvest Land Inc. to offer as much as P7 billion worth of retail bonds.

FLI was given the go-ahead to offer to the public P5 billion worth of fixed-rate retail peso bonds. The offer size can be increased by another P2 billion in case of strong demand.

The bonds will have a tenor of seven years with an indicative interest rate of between 5.2097 percent and 5.5597 percent per year.

Proceeds from the offering will be used to repay debt and partly finance capital expenditure requirements for the fourth quarter of 2014 and for 2015.

The bonds will be distributed to retail and/or qualified institutional investors through a public offering.

Joint issue managers and bookrunners are BDO Capital & Investment Corp., BPI Capital Corp. and First Metro Investment Corp. while co-lead underwriter is EastWest Banking Corp.

Based on SEC documents, the corporate watchdog deferred action on this bond issuance proposal in the last two en banc meetings, citing FLI’s failure to disclosure in the prospectus a 2003 case on insider trading that was filed in the SEC’s Office of the General Council involving parent company Filinvest Development Corp.

The SEC thus required FLI to amend its prospectus to include under the risk factors a discussion on the reputational risk and other risks to FLI and its directors and officers in case of an adverse ruling against FDC.

FLI agreed to cite in its amended prospectus the complaint filed by the compliance and enforcement department of the SEC against FDC.

“The issuer (FLI) is not in any way involved, nor impleaded as a respondent in the said administrative complaint. In the event of an adverse decision against FDC, FLI has existing contingent measures to address the reputational and other risks, if any that may arise as a result thereof,” FLI said.