VISTA LAND and Lifescapes, Inc. (VLL) received strong market response for its $350-million seven-year bonds, noting the issue was five times oversubscribed.

In a statement issued on Tuesday, the Villar-led firm said the final orderbook for the issuance reached $1.7 billion, making it the largest raised by the company on a primary offering.

Investors’ response on the offer prompted VLL to price the bonds at 5.75%, 37.5 basis points tighter than its indicative price guidance of around 6.125%. VLL plans to issue the bonds by Nov. 28.

“The ability of (VLL) to price much tighter is a testament to the credit profile of the company, and the confidence it enjoys from offshore investors who continue to support their issuances,” HSBC (Philippines) Ltd. President and CEO Jose Arnulfo A. Veloso was quoted as saying in a statement.

HSBC along with DBS Bank Ltd. acted as joint lead managers and bookrunners for the issue, as well as joint dealer managers for the tender offer. Meanwhile, VLL has tapped China Bank Capital Corp. as domestic manager for the bonds.

VLL said 121 accounts made bids for the bonds. Of this, 87% hailed from Asia, while 13% were from Europe, the Middle East, and Africa.

Fund managers or 72% took up most of the order book, followed by banks at 16%, and private banks and other institutional accounts at 12%.

Proceeds of the issuance will be used for debt refinancing. VLL has $51.8 million worth of bonds with an interest rate of 6.75% set to mature in 2018, and another $180.8 million with an interest rate of 7.45% due on 2019.

The company earlier announced it will be conducting a tender offer under a liability management exercise for the bonds. 

“The new bond issue coupled with a liability management transaction, allows Vista Land to reduce our short term refinancing risk, extend our maturity duration and realize interest expense savings,” VLL President and Chief Executive Officer Manuel Paolo A. Villar was quoted as saying in a statement.

Mr. Villar added this international bond exercise will widen their relationships with investors overseas.

“It also provides us an opportunity to continue diversifying our sources of funding, ensuring we continue to build key relationships not only with our investors onshore, but also with investors from Europe and Asia,” he added. 

VLL booked an 11% increase in attributable profit in the first nine months of 2017 to P6.95 billion, as revenues likewise rose by 11% to P26.86 billion on the back of strong residential sales.

Shares in VLL lost 21 centavos or 3.44% to close at P5.90 apiece at the stock exchange on Tuesday. — Arra B. Francia

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