AS part of its capital-raising initiative, P.A. Alvarez Properties and Development Corp. (P.A. Properties) has successfully tapped the domestic equity market through the issuance of the first tranche of its perpetual notes offering.
The proceeds at an undisclosed amount will be used to bankroll a portion of the company’s property development and land-banking initiatives in line with its future expansion.
“The successful launch of the perpetual notes program provides us additional legroom to acquire more properties to meet our five-year development plans,” said Romarico Alvarez, chairman of P.A. Properties.
The Laguna-based real-estate firm has partnered with PNB Capital & Investment Corp. and institutional lenders for the issuance.
“As the issue manager and lead arranger, we are delighted to be able to take part in P.A. Properties’s fund-raising activity considering that this is a landmark issuance—the second of its kind ever issued in the domestic capital market,” said PNB Capital President and CEO Gerry B. Valenciano.
“Moving forward, we see that more and more companies will issue perpetual notes as the market becomes familiar with hybrid securities,” he added.
The Perpetual Notes were issued under Rule 10.1 of the 2015 SRC Rules as an exempt transaction.
In this regard, the securities were offered only to primary institutional lenders.
Following the success of the company’s initial offering of fixed-for-life senior perpetual securities, Alvarez bared their plan to issue more in the first three months of the year.
“Given the positive reception of the market, we’re aiming to issue the final tranche in the first quarter of 2019,” he said.
P.A. Properties is one of the largest developers of low- to medium-cost housing communities for over two decades, with an inventory of about 19,000 residential units in Laguna, Cavite, Batangas, Bulacan, Pampanga and Metro Manila.
With nearly 25 years of experience in developing affordable housing and communities, it is well-positioned to capitalize on the huge housing backlog via its five-year development plans for 25 future projects estimated to build 15,000 more housing units and generate up to P25 billion in revenues.
The lack of housing in the country is expected to reach 10 million units in the socialized, economic and low-cost housing segments by 2030.
Out of its 137 hectares of landbank, the firm has already completed a total of 40 affordable housing communities with 16 more housing communities under construction.
In 2017, the company executed a partnership deal with Japanese real-estate developer Hankyu Hanshin Properties Corp. to develop three township projects, such as the 11-hectare Idesia 1 in Dasmariñas, Cavite; 26-hectare residential and commercial project in Dasmariñas, Cavite; and 17-hectare housing and commercial project in Lipa, Batangas.
Collectively, these 54-hectare projects are projected to generate a revenue of P11.25 billion. P.A. Properties has a capitalization of P3.3 billion as of October 2018.
Homegrown P.A. Properties recently signed the second and third joint-venture agreements with Hankyu Hanshin Properties Corp., an Osaka-based real-estate firm involved in property development and land, house and condominium sales. The new joint-venture agreements are part of the five-year plan of HHPC to launch two to three projects every year with P.A. Properties up to year 2023.