CREIT set to issue ASEAN green bonds to expand its real estate portfolio

CITICORE Energy REIT Corp. (CREIT) said on Tuesday that it will be tapping the capital markets for the issuance of ASEAN green bonds in the fourth quarter of this year to expand its real estate asset portfolio.

“We want to fast-track this initiative to facilitate our growth trajectory, as disclosed in the REIT plan, at the same time keep our borrowing costs at manageable levels, considering the continued pressure on global interest rates,” Oliver Y. Tan, president and chief executive officer of CREIT, said in a stock exchange disclosure.

In its registration statement filed with the Securities and Exchange Commission, the company said it is offering bonds worth P3 billion, with an oversubscription allotment of up to P1.5 billion.

CREIT added that it also intends to use part of the proceeds to acquire land parcels totaling 500 hectares to host affiliate solar power developers.

ASEAN green bonds’ proceeds are meant to be exclusively used to finance or refinance, in part or in full, new or existing eligible green projects that comply with regulatory standards.

CREIT said that the move is part of its “levering up program” from zero-debt to minimum leverage of 35% of its invested capital to fund the acquisition of new properties, and to maintain its growth momentum.

“With the investment grade rating, CREIT effectively increased its debt headroom and allowable leverage from 35% to 70% of deposited properties, currently at P14.5 billion, before acquisition of the new target assets,” Mr. Tan said.

In a separate regulatory filing, CREIT said that it had disbursed to date P308 million of its initial public offering (IPO) proceeds for its AFAB solar rooftop project through wholly owned subsidiary Sunny Side Up Power Corp.

Meanwhile, P1.55 billion from the IPO proceeds had been used for the first phase of the Arayat solar farm, which is a joint venture with ACEN Corp.

A total of P966 million was allocated for the second phase of the Arayat-Mexico solar farm, which is expected to be completed by the first quarter of 2023.

CREIT said that its Batangas A and Batangas B solar farms had been allocated a total of P1.42 billion and P377.1 million, respectively, for the construction of their 90 megawatts (MW) and 40-MW projects.

Further, P1.49 billion was set aside for the 20-MW Isabela run-of-river hydro project. Of the amount, P444.6 million had been disbursed as of Sept. 30.

On Tuesday, shares in CREIT closed 1.36% higher to finish at P2.23 apiece. — Ashley Erika O. Jose