PNB Capital and Investment Corp., the asset management arm of the Philippine National Bank, helped craft a perpetual bond exercise that allowed P.A. Alvarez Properties and Development Corp. (P.A. Properties) to generate P1 billion from a small group of investors.
The perpetual notes, a hybrid form of security that does not mature, were booked as equity and will be used to expand the real-estate activities of P.A. Properties in the country, which includes land banking over the next five years.
As the sole issue manager and lead arranger, PNB Capital structured the notes that allows the property developer to tap long-term funding while keeping its leverage position at manageable levels.
PNB president and CEO Jose Arnulfo “Wick” Veloso recognizes the importance of owning a house by every Filipino and the sector’s contribution to economic growth.
“The market for housing is something that is very important because it provides the basis for decency in a community. Individuals who own houses have been able to grow and in all economic and historical sectors, this was how the growth of wealth actually starts,” Veloso said.
“So, it is not just a roof over your head but it is the start of a very good economic journey that you begin by providing housing to individuals,” he added.
“We are grateful to have PNB Capital as the sole issue manager and lead arranger of this private placement. The successful execution of this offering addresses our funding needs, provides incremental capital to finance our robust development pipeline and extends our debt maturity profile while motivating us to explore similar fund-sourcing initiatives in the future,” P.A Properties chairman Romarico Alvarez said.
PNB Capital said the perpetual notes were warmly received by the market who acknowledged P.A. Properties’ strong 25-year track record in the housing industry, robust revenue growth, stable financial position and firm partnership with the Japanese conglomerate, Hankyu Hanshin Holdings Group.