6.0% PENDERGARDENS DEVELOPMENTS PLC 31.07.2022

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Pendergardens Developments plc - Prospectus dated 5 May 2014

The Company

Pendergardens Developments plc was established on 5 November 2012, to principally raise funding through debt issuances and subsequently develop Phase II of the mixed-use development (residential, office space and commercial) at the Pendergardens in St. Julian’s. Currently, the Issuer has an issued share capital of €3.3 million which was created as part consideration for the acquisition of the land on which Block 16 is being constructed.

The parent company, Pender Ville Limited, was set up on 22 July 2005 by a consortium of investors to acquire and develop the Pender Place site (known as Pendergardens) and the Mercury House site (known as The Exchange) located in St. Julian’s. In July 2012, the whole project, comprising the two pieces of land in St. Julian’s referred to as Pendergardens (18,500 square metres) and The Exchange (8,500 square metres), was granted full development permits by MEPA.

Pendergardens:

 

  • Phase I: To date Blocks 10 to 15 on the Pendergardens site, comprising 150 residential apartments and 406 car spaces, have been constructed by Pender Ville Limited. Practically all of the apartments have been sold (except one which is being used as an office) whilst only 183 (45%) of the available car spaces have been sold.
  • Phase II: The Series I and Series II bonds are being issued to finance the development of this phase of the project and the success of this bond is dependent upon the Issuer’s ability to complete and sell the project in time for the redemption of these bonds.

This second phase is split into three components as follows:

 

  • Block 16, comprising 46 apartments and 1,336 square metres of commercial space, is already under construction with works expected to be completed by mid-2015. To date, the Issuer has already sold 24 out of the 46 apartments in this block for a total consideration of €6.9 million.
  • Block 17, comprising 43 apartments and 5,853 square metres of retail space, is scheduled to be completed in three years between the first quarter of 2015 and 2018.
  • Towers I & II, will be the flagship property of the project. The two towers comprise 30 apartments and 8,784 square metres of office space. Construction works will commence in the third quarter of 2014 and Towers I & II are also expected to be completed by 2018.

The three blocks will also be complemented by a 4-floor underlying car-park. Some spaces will be available for sale to residents and the rest will be offered as a public car park.

The primary objective of the Issuer is to dispose of all the units (residential, commercial and office space) forming part of Phase II. Pendergardens however intends to lease out the commercial and office space until it is eventually sold.

Use of Proceeds

The net proceeds from this €27 million bond issue and the €15 million of 5.5% secured bonds maturing in 2020, estimated at €41.25 million after issuance costs, were principally used by the Issuer as follows:

i) funded the redemption of the outstanding unlisted €12 million notes which the Issuer intends to redeem at the first Early Redemption Date of 15 January 2015;

ii) acquired the land over which the two towers and Block 17 will be developed and to settle amounts owed with respect to works already executed on the aforementioned land (circa €8.95 million);

iii) part-financed the construction and development of Phase II comprising Block 16, Towers I & II and Block 17 (circa €20 million).

The remaining €26.1 million funding required to complete Phase II is expected to be generated from net sales of the residential and commercial units within the same project.

Status & Security

The Bonds will be secured by a first-ranking general hypothec over all the present and future assets of the Issuer as well as by a first-ranking special hypothec over the plot of land, measuring 4,596 square metres and earmarked for the construction of Block 16, Block 17 and Towers I & II, together with the improvements made thereon. The Issuer also intends to pledge the proceeds of an insurance covering the replacement value of the Project in favour of bondholders.

The Bonds shall constitute the general, direct, unconditional and secured obligations of the Issuer, and the two series shall rank pari passu between themselves, but with priority or preference over any other unsecured indebtedness of the Issuer.

Nonetheless, the Issuer may, from time to time, without the consent of the Bondholders, create and issue further debentures, debenture stock, bonds, loan notes, or any other debt securities provided that no issue may be made that would rank senior to the Series I & II Bonds.

The Issuer may incur further indebtedness on a short to medium term basis that may rank pari passu with the Bonds for the purpose of bridging any cash flow shortfalls arising from the proceeds of sales from the Project..

Coupon

6.0%

Amount Issued

€27,000,000

ISIN Code

MT0000791211

Maturity

The bonds will mature at 100% (par) on 31 July 2022.

Interest Payment

Annually on 31 July

XD Dates

15 July

Listing

Official List

Directors

Edmund Gatt Baldacchino (Chairman), Edward Licari, John Attard, Philip Farrugia, Joseph FX Zahra and Massimo Vella (Company Secretary).

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