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Century Properties to raise P3B in fixed-rate retail bonds sale

The property firm’s board has cleared the public offering of P2 billion unsecured fixed-rate peso bonds, with an oversubscription option of P1 billion

MANILA, Philippines – Antonio family-led property firm Century Properties Group Inc. (CPG) is raising P3 billion ($68.54 million) through maiden issuance of fixed retail bonds.

In a disclosure to the stock exchange Friday, June 20, CPG said its board approved the public offering of unsecured fixed-rate peso denominated retail bonds worth P2 billion ($45.69 million) with an option for oversubscription of P1 billion ($22.85 million).

The bonds, with tenors of 3, 5, and 7 years, will be registered with the Securities and Exchange Commission (SEC) and will be listed with the Philippine Dealing & Exchange Corp.

BDO Capital and HSBC were also engaged as joint underwriters and book runners while Primeiro Partners is the financial advisor on the transaction.

As of June 6, Credit Rating and Investors Services Philippines Inc (CRISP) has assigned an ‘AA+’ issue rating with a stable outlook on the bonds, attributing this to “CPG’s strong market presence, healthy financial position, and excellent land banking strategy.”

Based on CRISP’s rating scale, an ‘AA+’ rating denotes very strong capacity to repay debt obligations.

“This maiden bond issuance is a major milestone in our corporate history,” said CPG Chief Financial Officer Jose Carlo R. Antonio. “It is in line with our strategy to diversify our funding base and pursue growth opportunities that enhance returns to shareholders over the medium- and long-term,” he added.

The net proceeds of the bonds will be used to partially finance capital expenditures for a portion of CPG projects scheduled for completion from 2017 to 2019.

“By 2019, CPG will complete 1.67 million sq. m. of development, consisting of 31 buildings and over 150,000 sq. m. of commercial space for lease, in addition to our landbank of 200 hectares to develop in Metro Manila, and are looking at other promising areas in the country…” Century Properties Executive Chairman of the Board Jose E.B. Antonio said.

Early this month, CPG’s wholly owned unit Century City Development Corp signed a $30 million secured facility agreement with Golden First Century Pte Ltd, a company affiliated with Phoenix Property Investors.

Proceeds from the facility shall be used to partly finance Century Spire, designed by renowned architect Daniel Libeskind, to be located in Century City, Makati.

More projects, more revenues

In February, CPG said it would complete 4 real еstatе development projects in 2014 to boost company revenues.

In the first quarter of 2014, net income of CPG inched up by 3% to P513 million ($11.72 million) from P500 million ($11.42 million) posted in the same period a year ago.

Consolidated revenues grew 10% to P2.6 billion ($59.40 million) from P2.39 billion ($54.60 million) in 2013.

Revenues from real еstatе sales, amounted to P2.39 billion ($54.60 million), an 8% increase from P2.21 billion ($50.49) the previous year.

Reservation sales for the first 3 months of 2014 totaled P5.3 billion ($121.09 million), of which 69% were affordable projects or units priced below P3.6 million ($82,248.11), 22% were middle-income projects or units priced between P3.7 million ($84,532.79) and P7.2 million ($164,496.23), and 9% were luxury projects or units priced above P7.3 million ($166,780.90).

Apart from its residential business, CPG has been focused on building its investment portfolio for recurring income, the first of which was the Century City Mall which opened in February this year.

Other projects in the pipeline include Centuria Medical Makati, which will be completed at the end of the year; Century Spire, which will complete the premium office block in Century City; an office building in Bonifacio Global City to be completed by 2017; and Acqua 6 at its Acqua development.

CPG was also set to develop a property in Entertainment City when in October 2013, it struck a deal with Japanese pachinko billionaire Kazuo Okada’s group to develop land within the government-owned gaming hub in Manila.

In April 2014, CPG asked the Makati City Regional Trial Court to stop the group from terminating their agreement to develop a $2-billion Manila Bat Resorts casino complex in Entertainment City.

The agreement would have given CPG and another company, First Paramount Holdings 888 Inc, stakes in Eagle I, which owns a 30-hectare property in Entertainment City. Apart from owning a stake, CPG was supposed to develop a 5-hectare luxury residential and commercial project within the complex.

Source: Rappler | June 21, 2014


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