REAL ЕSTATЕ DEVELOPER Century Properties Group, Inc. has secured a loan facility worth up to P4.2 billion that will be used to fund three projects, the company said in a disclosure yesterday.

The five-year dual-currency secured term loan facility was arranged by Standard Chartered Bank, which also served as book runner. Premeiro Partners served as financial adviser.

The facility “targeted… both domestic and international banks and received commitments both in US dollars and Philippine pesos,” the disclosure read further.

The facility will be used “to meet construction costs, land cost, general expenditure and financing costs exclusive to seven buildings located across three project developments of Century Properties Group,” it added, without identifying the projects.

“This secured long-term loan facility accomplishes a few milestones for Century Properties. First, it lowers Century Properties cost of debt as the facility’s rate of three month PDST (Philippine Dealing System Treasury) + 4%, or the BSP (Bangko Sentral ng Pilipinas) Overnight Rate + 2% — which ever is higher — significantly brings down financing costs,” the disclosure quoted Century Properties Chief Financial Officer Jose Carlo R. Antonio as saying.

“Second, the facility secures the working capital needs of seven pre-sold projects that are targeted to be turned over between 2015 to 2017,” he added.

“In addition, it provides Century Properties financial flexibility by allowing profits from completed and soon-to-be-completed projects, as well as funds raised from the recent equity placement, to embark on growth opportunities to enhance shareholder value.”

The PDST and BSP Overnight Rates are benchmark interest rates. BSP’s overnight borrowing rate is currently at a historic low of 3.5% and is widely expected by analysts to be maintained at that level when the central bank’s policy-making Monetary Board meets tomorrow. PDST rate is currently at 2%.

The company’s pre-sold projects include The Gramercy Residences, Knightsbridge Residences, Milano Residences and Trump Tower inside its 3.4-hectare mixed-use site in Bel-Air, Makati City; Acqua Private Residences, a six-tower residential development in Mandaluyong City fronting the Pasig River; Azure Urban Resort Residences, a nine-building, six-hectare development featuring a man-made beach and club designed by socialite Paris Hilton; and Canyon Ranch, a 25-hectare subdivision community inside the 77-hectare San Lazaro Leisure Park in Cavite City.

It is also the firm behind the Centuria Medical Makati, a partnership with GE Healthcare, and the Residences at Commonwealth in Quezon City.

Century Properties grew its net income by 10% to P501 million in the first quarter from P454 million in the same three months last year on higher sales. In the same comparative periods, revenues rose by 5% to P2.6 billion from P2.5 billion. Pre-sales stood at P5.8 billion, 10% more than the previous year.

Growth was attributed to sales growth of Trump Tower at Century City and Acqua Iguazu yoo inspired by Starck, which are both located in Makati City; as well as Azure Urban Resort Residences in Parañaque City and the Residences at Commonwealth projects in Quezon City.

The company has earmarked as much as P8.2 billion for capital expenditures this year to fund ongoing projects. That amount is 13% more than the P7.26 billion that was actually spent last year.

Shares of Century Properties lost 12 centavos or 6.03% to close at P1.87 yesterday from P1.99 each last Monday.

The fall was broadly in line with the market’s general weakness yesterday. A mix of news on improved economic outlook for the United States and local data that reminded of chinks in the Philippine growth story sent stocks plunging yesterday, nearly erasing gains of the preceding three trading days. The Philippine Stock Exchange index fell by 318.95 points or 4.64% to close at 6,556.65, while the broader all-share index erased 165.90 points or 3.92% to 4,063.71. It was the sharpest drop of the market since Sept. 23, 2011 when the main index fell 5.13%.

Source: Businessworld Online | June 11, 2013