PHILIPPINE National Bank’s (PNB) investment banking arm PNB Capital and Investment Corp. has generated P1 billion in fresh funds from the private placement of perpetual notes for developer P.A. Alvarez and Development Corp.
The issuance was the first domestic offering of such notes by Laguna-based P.A. Properties, one of the largest low- to medium-cost housing developers in key growth areas of Luzon.
Unlike conventional debt securities, perpetual notes do not have maturity dates, but pay a steady stream of interest payments in perpetuity, just like bonds. These notes can be redeemed upon the discretion of the issuer.
Proceeds will be used to fund the company’s property-development initiatives, including land banking, over the next five years.
“The successful execution of this offering addresses our funding needs, provides incremental capital to finance our robust development pipeline, and extends our debt maturity profile while motivating us to explore similar fund-sourcing initiatives in the future,” P.A. Properties Chairman Romarico Alvarez said in a ceremony in Makati City last Friday.
“We are grateful to have PNB Capital as the sole issue manager and lead arranger of this private placement,” he added.
PNB Capital said it had structured an innovative financial instrument that enabled P.A. Properties to tap long-term funding while keeping its leverage position at manageable levels.
Going forward, Alvarez said P.A. Properties would tap other funding sources to achieve double-digit growths in the next five years.
As of last year, the property developer has a capitalization of P3.8 billion. It has built about 19,000 housing units in Laguna, Batangas, Bulacan, Cavite and Pampanga provinces, and Metro Manila.
P.A. Properties said it continued to embark on strategic expansion efforts to build 25 additional housing communities in the next five years to help ease the more than 6 million housing backlog in the Philippines and contribute to the growth of the economy.