P11-B FLI bond issue OKd

The Securities and Exchange Commission has approved the plan of Gotianun-led property developer Filinvest Land Inc. to issue P11 billion worth of seven-year retail bonds.

Proceeds of the issue will be used to bankroll expansion programs slated for this year.

The FLI bonds will be offered in two tranches beginning with a P7 billion issuance on June 8. The remaining P4 billion will be issued by the third quarter, based on documents from the SEC.

The seven-year bonds will carry a fixed interest rate equivalent to comparative PDST-F rate plus a spread of 60 to 125 basis points. The indicative rate is a range of 5.7658-6.4158 percent a year for the first tranche.

Interest on the bonds due 2019 will be paid quarterly.

Proceeds from the offering will partially finance projects to be undertaken by the company in 2012, for which FLI has set a capital spending budget of P14.9 billion.

The projects to be funded by FLI are: high-rise projects in Metro Manila and Cebu (P1.95 billion); medium-rise projects in Metro Manila, Davao City and Rizal (P5.45 billion); investment properties in Metro Manila, Cavite and Cebu City (P3.87 billion); subdivisions in Metro Manila, Cavite, Cebu City and other provinces (P3.08 billion); and, land acquisition in Rizal, Pasig, Cebu and Quezon City (P538.33 million).

BDO Capital, BPI Capital, First Metro Investment Corp. and HSBC are the joint lead underwriters of the offering.

A minimum purchase of P50,000 will be considered for acceptance. Purchases in excess of the minimum will be in multiples of P10,000.

The proposed P11-billion offering was rated triple-A by local credit watcher Philippine Rating Services Corp., which cited the following factors: healthy growth of real estate and leasing operations resulting in strong income generation; diversified portfolio; sound debt position and financial flexibility; established brand name; and favorable economic and industry conditions.