Vista Land shelves $700-M bond offer amid tepid demand

MANILA, Philippines  —Tycoon Manuel Villar Jr.’s flagship property firm Vista Land & Lifescapes Inc. postponed a $700-million (P39.2 billion) overseas bond sale amid tepid demand from buyers, underscoring debt market constraints faced by corporations while interest rates remain elevated.

Vista Land canceled plans for its US-dollar 5NC 3-year notes that were priced at 8.875 percent after bond investors sought higher returns. The cancelation was first reported by debt market-focused news service Debtwire.

A source with knowledge of the matter told the Inquirer that bond investors sought yields above 9 percent. While the final price was set, the issuer decided to drop the offer and may return to the market after rates come down, the source said.

Stiff competition

The report by Debtwire also suggested that Vista Land faced competition from a $1.8-billion bond sale launched by Japanese technology giant Rakuten, which offered a yield above 12 percent.

Vista Land officials did not immediately reply to a request for comment on Thursday.

READ: Vista Land seeks $2B from new borrowing push

Vista Land earlier tapped overseas banks DBS Bank Ltd. and HSBC as joint lead managers and joint bookrunners for a series of investors calls last Jan. 26.

It said the bonds will be issued via wholly-owned subsidiary VLL International Inc.’s $2 billion bond program.

Strong domestic credit rating

VLL International has issued long-term US dollar bonds worth P42.9 billion. About 45 percent of the debt, or P19.34 billion, is due in November this year while the remainder is due on June 2027, Vista Land’s latest annual report showed.

Vista Land concluded a domestic bond sale last December, where it raised P6 billion to mainly refinance debts.

READ: Vista Land raises P6B from bond sale

This was from a maximum offer size of P10 billion. Vista Land emphasized its strong domestic credit rating at the time, stating that the bonds were given top debt scores by Credit Rating and Investors Services Philippines Inc. and Philippine Rating Services Corp.

Vista Land said earnings growth during the first nine months of the year as net income jumped 70 percent to P8.2 billion. Revenues from January to September this year reached P27.4 billion, up 18 percent versus the same period in 2022.