Century Properties Group Inc. (CPG) secured P3 billion in new funds from its follow-on offering of preferred shares, which it plans to utilize to expand its commercial leasing business.
The property developer said its largest equity capital markets transaction was twice oversubscribed from the P2 billion issue size. CPG exercised its P1 billion oversubscription option as a result.
The recent follow-on offering saw CPG offer 20 million preferred shares at P100 each, with an oversubscription option of up to 10 million preferred shares. The offer period ran from 16 December 2019 to 3 January 2020.
Strong demand lead to CPG pricing the transaction at the tight end of the pricing range of 275 to 325 basis points. Dividend rate was set at 6.7177 percent per annum to be paid quarterly for three years.
CPG mandated China Bank Capital Corp. as sole issue manager, lead underwriter and sole bookrunner for the transaction.
“We are very pleased to usher the new year with the first equity listing for 2020. The success of CPG’s preferred shares offering demonstrates the market’s confidence in the company’s strategy of sustaining its impressive growth through a diversified property portfolio,” China Bank Capital president Ryan Martin Tapia said.
The fund-raising activity is part of CPG’s bid to widen its footprint in the commercial leasing and affordable housing segments, in support of its larger goal of diversifying its real estate portfolio.
CPG said the segments are estimated to contribute at least 30 percent of its net income in the next three years. In 2019, CPG also raised P3 billion in fresh funds from the issuance from its retail bond offering.
The proceeds were used to finance CPG’s affordable housing and townhome projects. Prior to its expansion, CPG focused on high-rise condominium developments.
CPG registered 81 percent higher net income in the first nine months of the year, to P1.2 billion from P661 million in the same period in 2018. CPG said this exceeds its full-year 2018 net income of P1.1 billion.