DMCI Homes eyes P10-b notes
DMCI Homes, the property unit of DMCI Holdings Inc. of the Consunji family, plans to raise P10 billion next month through the issuance of corporate notes.
DMCI Homes chief finance officer Ramil Lombos said in an interview the company hired BDO Capital and Investment Corp. as lead arranger of the notes issue.
“The signing will happen on Nov. 12 but the drawdown will happen first quarter of next year,” Lombos said.
The notes will have tenors of five and seven years with interest rates of between five percent and 5.5 percent. The planned issue may involve several financial institutions, including Security Bank Corp. and Bank of the Philippine Islands.
DMCI Homes plans to use proceeds from the notes issuance to finance P5 billion in maturing corporate notes in 2016 and fund the property company’s aggressive expansion plans.
“The P5-billion notes maturing next year carry an interest rate of seven percent so we’re getting a cheaper money,” Lombos said.
Lombos said DMCI Homes’ capital spending in 2016 had been set at P12 billion, up from the P10-billion programmed spending this year.
Meanwhile, Lombos said the demand for company’s P500-million bond issuance under the HomeSaver Bonds haf been strong.
Lombos said the total subscription had reached 70 percent of the total with still two weeks go to before the end of the offering period.
He said the company might consider increasing the size of the offering by another P500 million if the demand exceeded the original amount.
The SEC earlier approved the plan of DMCI Homes to issue P1 billion worth of HomeSaver Bonds.
The company initially offered P500 million and kept the balance of P500 million under shelf registration.
HomeSaver Bonds is an interest-earning financial instrument that primarily targets retail investors who wish to set aside funds that may be used as full or partial downpayment to purchase units in any DMCI Homes development.
The bonds are available for a minimum subscription of P5,000 per month, while the offering period started on Sept. 23 and would end on Nov. 5. The company hired SB Capital as underwriter for the bond sale.
DMCI Homes is issuing the bonds in three tranches. Tranche A bonds will have minimum investment of of P180,000 and payable in equal monthly subscription payments of P5,000 over a period of three years.
Tranche B bonds will have a minimum investment of P300,000 and payable in equal monthly subscription payments over a period of five years, while tranche C bonds will be issued one-time with a minimum investment of P180,000.
Tranche A and tranche C bonds will both carry a fixed interest rate of 4.5 percent per annum while tranche B bonds will have a fixed interest rate of 5 percent per annum.
DMCI Homes earlier projected net income reaching P3.6 billion in 2015, up 11 percent from P3.2 billion in 2014, as it plans to launch five new residential projects offering more than 3,000 units.