PNB unit extending P4 B loan for Laguna property developer

Lawrence Agcaoili (The Philippine Star) - May 13, 2019 - 12:00am

MANILA, Philippines — The investment banking arm of Philippine National Bank (PNB) is finalizing a syndicated loan facility for low- to medium-cost housing developer Laguna-based P.A. Alvarez Properties Development Corp. to finance its massive landbanking activities in Luzon.

In an interview with reporters, PA Properties chief financial officer Gregorio Perez said his company is finalizing a syndicated loan facility with PNB Capital and Investment Corp. worth between P3 billion and P4 billion over the next few months.

“We are looking at a range of P3 billion to P4 billion to fund landbanking activities for the next two years. We have to take advantage of existing land prices,” Perez said.

Perez said the property developer is looking at launching 25 new projects over the next five years to augment its existing 16 projects after raising P1 billion via the issuance of perpetual notes to finance its development initiatives including landbanking.

Perez said the proceeds of the planned syndicated loan facility would be used to augment its existing landbank of 137 hectares by another 200 hectares for the next five years.

Perez said PA Properties is spending up to P3 billion for its landbanking activities.

Jojo Abad, senior vice president at PNB Capital, said market reception for the perpetual notes was positive due to the 25-year track record of PA Properties as well as its strong revenue growth and stable financial position.

PNB Capital completed the first-ever domestic offering of the private placement of perpetual notes by PA Properties that raised P1 billion. It structured an innovative financial instrument, enabling the property firm to tap long-term funding while keeping its leverage position at manageable levels.

PNB president and chief executive officer Jose Arnulfo Veloso said the market for housing is very important because it provides the basic amount of decency to a human being.

“This is how the growth of wealth actually starts. So it is not just a roof over your head but it is a start of a very good economic journey that you start by providing housing to individuals,” Veloso said.

PA Properties chairman Romarico Alvarez said the successful offering addressed the funding needs of the company and provides incremental capital to finance its robust development pipeline.    

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