Filinvest holding firm to issue 5-year notes

Filinvest Development Corp., the listed holding company of the Filinvest group of companies, issued five-year corporate notes worth P1 billion to state-run Development Bank of the Philippines (DBP). In a disclosure, corporate information officer Abner C. Gener, Jr. said the issuance will be secured by a real-estate mortgage on certain real property of the Filinvest Development in Mactan, Cebu and a pledge of certain common and preferred shares of Filinvest Asia Corp., which is a joint venture between Filinvest Development and Reco Herrera Pte. Ltd., an investing vehicle of the Government of Singapore Real Estate Ltd. "The proceeds of the corporate notes facility will be used to refinance the corporation’s obligations and/or those of its subsidiaries, and to fund its new developmental projects," he added. Yesterday, Filivest Development shares closed 2.94% higher to P3.50. Nelson Bona, treasurer of Filinvest Development, told BusinessWorld that P500 million has been taken up by the corporate banking and trust group of DBP, which is the lead arranger and manager, while the balance would be offered to other banks as a syndicated facility until November. "The yield rate of the first tranche is fixed at MART plus 1% for five years while the second tranche will be a floater based on 91-day MART 1 plus 2%. Banks would like floater because of the low interest rate scenario," he added. Also known as "floating-rate debt," a floater is a bond or other type of debt whose coupon rate changes with market conditions. MART 1 is the benchmark rate for buying and selling government securities in the secondary market. MART stands for the Money Market Association of the Philippines. The proceeds will be used for the first phase of its 12-hectare beach resort project in Mactan. "Surrounding the club from which shares will be sold to the public are casitas for rent or time-sharing and residential for retirees and tourists. The second phase would be expansion of the project. The plan is to put up several condominium buildings for retirees and tourists," he added. BusinessWorld earlier reported that Filinvest Development will tap local banks for a P620-million loan for the first phase of the beach resort project in Mactan. Filinvest Land, Inc. First Vice-President Fely T. Ramos earlier said the first phase of Seascapes Resort Town will be completed next year. "This is the only project Filinvest Development is directly involved for now. It is not yet open to the public. We are doing land development right now. We are looking at a syndicated financing or enter a loan agreement," she added. -RUBY ANNE M. RUBIO, Business World Reporter