November 13, 2013

FLI issues another P7b worth of bonds

Filinvest Land Inc yesterday disclosed that it has issued P7b worth of bonds due 2020 and 2023 at 4.8562% and 5.4333%, respectively. It said the bonds were fully subscribed and were issued and listed on the PDEx on 8 November.

Our take: We believe the bonds form part of the remaining P4b out of the P11b issuance the SEC approved last year. Only P7b worth of bond were issued last year at 6.2731%, indicating the new bonds are priced cheaper which should bode well for the company.

At any rate, we think FLI’s balance sheet can take in the additional debt given its 52% net gearing as at end-June 2013. Also, the new (and cheaper) funds should come in handy as the company is slated to build more BPO office buildings amid strong demand. But by our quick computation, this new bond issuances will result in P360m+ in additional annual interest payments which is roughly 8% of the 2014 full-year consensus net income forecast. – WealthSec