Cebu Landmasters Inc. said it has received one of the highest ratings, a PRS Aa+ with a stable outlook, from local credit rate Philippine Rating Services Corp. (PhilRatings) for its planned P8 billion bond sale.
The bond is divided into an initial P5 billion and another P3 billion covering the oversubscription option, and is the initial tranche of its P15 billion shelf-registered bond.
“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. PhilRatings may also include a plus (+) or a minus (-) to further qualify its ratings,” CLI said.
The outlook indicates CLI may likely maintain its rating for the bond within the next 12 months.
“The rating and outlook reflect the following key considerations: sound management and strategy, with a sustained competitive advantage in the Visayas and Mindanao (VisMin) markets as evidenced by its growth over the last few years; improved profitability, following the pandemic-induced minimal decline in 2020 on account of the company’s resilient operations amidst the COVID-19 pandemic; and adequate coverage of interest even with a higher debt position,” the company said.
It also indicates that threats from a highly competitive market, with peers having access to significant capital and a substantial landbank, is counterbalanced by CLI’s ability to form strategic joint-venture partnerships, the company added.
CLI tapped BPI Capital Corp. and China Bank Capital Corp., as joint issue managers, joint lead underwriters and joint lead bookrunners.
Grant Cheng, CLI chief finance officer, said CLI’s maiden bond offer is part of a strategy to sustainably maintain our growth and expansion plans as we serve the housing needs of the Filipino family.
“Especially in VisMin 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,” he said.
The bonds areeyed to be issued in the third quarter of the year, and has have an indicative maturities ranging from 3.5 to 7 years.
“Cebu Landmasters 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 company said in a statement.
“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 (Ming-Mori), CLI’s first reclamation project in Minglanilla, Cebu,” it added.
