Villar unit pitches 9.5% yield from bonds on sale

A subsidiary of developer Vista Land and Lifescapes Inc. is set to tap the debt market later this month for a budget boost ahead of a potential cut in the country’s key rates.

In a stock exchange filing on Monday, Vista Land said VLL International Inc., an entity created for the purpose of issuing debt papers, would issue Regulation S bonds under its $2-billion medium term note program. Regulation S notes are debt securities offered and sold outside the United States. Its name comes from Regulation S of the US Securities Act of 1933, which stipulates rules on offers and sales made in other countries.

According to the billionaire Manny Villar-led firm, it plans to offer the five-year bonds by July 29. Investors are projected to have a potential 9.5-percent yield on their holdings.

Vista Land has yet to issue the final price for the bonds, which will be listed on the Singapore Exchange.

Vista Land’s offering comes ahead of a potential interest rate cut, which could increase the prices of bonds. Inversely, rates would go down, impacting the value of investors’ holdings. If lenders buy bonds before the Bangko Sentral ng Pilipinas cuts rates, then they will be able to lock in higher yields.

“The net proceeds will be used for refinancing, working capital, investment and other general corporate purposes,” the developer said.

Union Bank of the Philippines will be the domestic lead manager, while DBS Bank Ltd. and HSBC will be the joint global coordinators, bookrunners and lead managers.

Vista Land’s earnings in the first quarter expanded by 11 percent to P3 billion, driven by new projects.

Revenues likewise jumped by 11 percent to P10 billion, while reservation sales reached P20.8 billion, up by 12 percent.

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Earlier this month, Vista Land said they were firming up plans to build additional amenities for Villar’s self-named “city.”Among the planned facilities in the 3,500-hectare Villar City are two golf courses, a church, events arena, university and an integrated entertainment complex.

The so-called megalopolis spans 15 towns and cities in Metro Manila and Cavite province.

The former senator and now chair of Vista Land also hinted at an upcoming partnership with a “renowned hospital.”

For the year, Vista Land plans to spend P29.4 billion on building new residential units and land development. This represents 98 percent of the company’s P30-billion full-year capital spending. INQ