April 25, 2014

VLL to issue US$220m senior notes

BusinessWorld today reported that a unit of Vista Land & Lifescapes Inc (VLL) is issuing US$220m worth of 5-year senior notes which carry an interest rate of 7.45%. The notes will be issued by VLL International Inc, a wholly-owned unit of VLL, but guaranteed by the parent firm and its other subsidiaries Brittany Corp, Crown Asia Properties Inc, Camella Homes Inc, Communities Philippines Inc, and Vista Residences Inc. Proceeds will be used to partly refinance existing debt and its capital expenditures.

Our take: The new notes carry a lower interest rate of 7.45% than the 8.25% cost of the previous notes that the VLL is redeeming. Other property companies have either turned to the peso debt market or issued dollar bonds at lower costs for their financing needs. Megaworld Corp (MEG) was able to issue a US$250m 10-year bond with a coupon rate of 4.25% in April last year while Ayala Land Inc (ALI) also issued the P4b of 7-year and P2b in 20-year bonds in3Q13 at 4.625% and 6%, respectively.– WealthSec