Developer’s ₧8-B bond issuance gets upgraded
CEBU Landmasters Inc. (CLI), a property developer mostly in the Visayas and Mindanao regions, said last Tuesday it secured an upgraded rating from a local credit rating firm on the maiden issuance of its P8 billion in bond float.
The company said its debt, composed of P5 billion and an oversubscription of up to P3 billion, has been assigned a “PRS Aa plus” rating with a stable outlook from the Philippine Rating Services Corp.
The said debt is the initial tranche of the company’s P15 billion in shelf registration program submitted to the Securities and Exchange Commission.
The ratings firm said it upgraded its ratings on the said paper from its previous rating of “PRS Aa.”
Obligations rated “PRS Aa” are of high quality and are subject to very low credit risk. The obligor’s capacity to meet its financial commitment on the obligation is very strong.
The firm may also include a plus or a minus to further qualify its ratings.
A stable outlook is assigned when a rating is likely to be maintained or to remain unchanged in the next 12 months.
The ratings firm said its ratings and outlook were based on CLI’S sound management and strategy, with a sustained competitive advantage in the Visayas and Mindanao markets as evidenced by its growth over the last few years and improved profitability despite the pandemicinduced profit decline.
It also considered CLI’S adequate coverage of interest even with a higher debt position.
“This maiden public bond offer of Cebu Landmasters is part of our strategy to sustainably maintain our growth and expansion plans as we serve the housing needs of the Filipino family. Especially in Visayas and Mindanao where the need for quality housing is constantly underserved, CLI is committed to delivering this essential need and contributing to the development of the communities we are helping to build,” CLI Chief Finance Officer Grant L. Cheng earlier said.
“We are pleased to have two of our strongest partners, BPI and Chinabank, manage this maiden issuance. We’re excited to bring our story to the public debt markets and we believe we have something unique to offer debt investors,” Cheng said.
The bonds have indicative maturities ranging from 3.5 to 7 years, with the periods to be determined during the final offer in the third quarter of this year.
The company said it will use the bonds to support its growth plans, primarily by investing into markets where CLI’S initial foray has exceeded expectations and continuing its strategic landbanking activities.
The fresh capital will also be deployed to large-scale estate projects such as the 22-hectare Davao Global Township, the 14-hectare Manresa Town in CDO, and the 100-hectare Minglanilla Techno-business Park (Mingmori), CLI’S first reclamation project in Minglanilla, Cebu.