CLI mulls another P5 billion bond offer later this year

MANILA, Philippines — Cebu Landmasters Inc. (CLI) is looking at another sustainability-linked debt facility later this year after successfully raising P5 billion from an oversubscribed sustainability-linked bond issuance.

CLI listed on Friday its P5-billion sustainability-linked bonds on the Philippine Dealing and Exchange Corp., reinforcing its commitment to addressing the country’s housing backlog and significantly expanding its affordable housing portfolio.

The company said the newly listed Series D and E bonds, due in 2028 and 2030, respectively, received strong market reception.

Series D bonds, totaling P2.86 billion, carry an interest rate of 6.6348 percent, while Series E bonds, worth P2.14 billion, have an interest rate of 6.9157 percent.

“This one, you have a bond offering that has a sustainability target attached to it. And it makes it very meaningful. So we’re just the second company to do this in the country,” CLI chief operating officer Jose Franco Soberano said.

As part of the sustainability-linked bonds, CLI chief finance officer Grant Cheng said the company is committed to building 8,500 affordable housing units by February 2027 as an intermediate target and then a total of 16,000 by February 2029.

“And that is a real economic condition, which means that not hitting those targets will result in our coupon rate getting stepped up. So we’re putting our money where our mouths are. If we don’t hit it, our interest rates will get expensive,” Cheng said.

A sustainability-linked bond is a unique financial instrument tied to an environmental, social and governance objective. If the issuer fails to meet its sustainability targets within a specified period, the interest rate increases.

CLI is the first real estate developer in the country to use affordable housing as the key success metric for a sustainability-linked bond.

With its latest sustainability-linked bond issuance, CLI is taking a definitive step toward making home ownership more accessible for Filipinos and ensure that the country’s housing needs are met through sustainable and impactful solutions.

The company so far has built over 14,000 affordable housing units, a number that will exceed 30,000 by the bond’s maturity.

The issuance marks the second tranche of CLI’s P15-billion shelf-registration program, leaving P5 billion available for future issuances.