Vista Land issued five-year bonds with an annual interest rate of 9.375 percent. This was part of a larger $2 billion debt program, a stock exchange filing on Tuesday showed.
The notes were unrated, meaning they were not evaluated by any credit rating agency. As a result, they are generally considered riskier and must offer a higher interest rate to attract investors.
Other local developers have also issued unrated bonds in the past.
Vista Land is guaranteeing the bonds, alongside subsidiaries, including Brittany Corp., Camella Homes, Inc., Communities Philippines, Inc., Crown Asia Properties, Inc., and Vista Residences, Inc.
Second time’s the charm
Last January, Vista Land sought to issue $700 million in offshore debt via three-year notes paying 8.875 percent.
It decided to walk away after bond buyers sought returns above 9 percent.
Debt payments
Fitch Group’s CreditSights noted the interest rate was relatively high, but stated that Vista Land will likely accept this given the upcoming maturity of $350 million worth of bonds in November.
“If the new [5-year] bond prices and is launched, it will take the [November 2024] bond refinancing risk off the table,” CreditSights said in a report.
Bigger picture
Like most other developers, Vista Land is betting on a wave of interest rate cuts to spur demand in home sales.
Last May, the company said it plans to spend around P30 billion to build new projects, especially in locations outside Metro Manila.
Net income during the first quarter of 2024 grew 11 percent to P3 billion while revenues reached P10 billion, also an increase of 11 percent.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
