CLI raising P5B from ‘green’ bond offer

Soberano-led developer Cebu Landmasters Inc. will raise up to P5 billion from the debt market to support its expansion plans outside the Visayas and Mindanao amid an anticipated improvement in real estate demand.

In a stock exchange filing on Monday, CLI said it had filed with the Securities and Exchange Commission a registration statement for the follow-on offering of its sustainability-linked bonds.

The issuance, which represents the second tranche of CLI’s P15-billion debt securities program approved in 2022, will consist of series D bonds due 2028 and series E bonds due 2030.

READ: CLI set to develop another P373M residential project in Cebu

CLI’s issuance will have a base offer of up to P3 billion and an oversubscription option of up to P2 billion in case of high demand.

In a separate statement, the developer said Philippine Ratings Services Corp. had issued a credit rating of PRS Aa plus with a stable outlook to CLI’s P5-billion offering.

This indicates that CLI has a “very strong capacity” to meet its financial obligations.

Based on the latest preliminary prospectus, CLI will use part of the proceeds to fund its capital expenditures and the development of its pipeline projects.

This comes amid the company’s plans to pursue its Luzon expansion despite the current inventory oversupply plaguing the National Capital Region.

CLI chief operating officer Jose Franco Soberano III previously told reporters that the market would likely “correct” next year and improve demand.

A condominium project will soon be in the works in Metro Manila, while a horizontal development will likely rise in Cavite province, according to Soberano.

CLI’s expansion into Luzon marks its first venture into the country’s largest island group, as its existing projects are currently in the Visayas and Mindanao.

Most of CLI’s developments cater to the middle-income segment, while other developers entering Cebu are launching high-end properties. CLI’s projects are 89-percent sold as of end-September, the company said.

The developer has so far launched P8.2 billion worth of projects this year totaling 1,662 residential units in the mid-market and economic segments.

In the first nine months of the year, CLI’s earnings grew by 7 percent to P2.3 billion due to a surge in leasing and hospitality revenues. —Meg J. Adonis