Metrovacesa registered a new Commercial Paper programme with a maximum outstanding of €100 million in MARF, BME’s Fixed Income Market. The programme will allow the Company to issue short-term debt with maturities up to 24 months and to diversify its funding sources during the following 12 months.

Metrovacesa is a real estate company headquartered in Madrid listed since February 2018. It was founded in 1918 and is currently present in 31 Spanish regions, concentrating its activity in large cities such as Madrid, Barcelona, Valencia and the Area of Costa del Sol.

Its main line of business is the residential market, but it is also present in land management and the tertiary land business. Currently, it has a land portfolio valued at 2,626 million euros as of June 2020, 5,000 homes on the market (in 86 projects) and nearly 3,500 homes under construction.

During the first half of 2020, Metrovacesa obtained sales of 97.3 Million Euros and a negative EBITDA of 8.1 Million Euros.

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Commercial Papers are an efficient source of funding

Commercial Papers are short-term money-market securities used as a funding source by financial institutions, as well as governments, supranational agencies and mid and large corporations.

For corporate issuers, Commercial Papers are an extremely efficient funding source, that is complementary to banking facilities and credit lines. It is an efficient working capital solution via Debt Capital Markets.

Commercial Papers are issued under a shelf programme, that has an annual validity (renewable) and a predetermined maximum outstanding size. Notes under a CP programme may be issued at a discount or at a premium, they may bear fixed or floating rate interest. Although CPs, most usually, carry an implicit coupon, they are issued at discount and mature at par (100%)

Maturity of Notes ranges from 3 days to 24 months for Pagarés Programmes and from 1 to 364 days for ECP (European Commercial Paper Programmes).

Commercial Papers are multi-currency instruments that can be issued in different currencies; predominantly in EUR, USD, CHF and GBP. They have a minimum denomination of €100K and are intended for wholesale institutional investors, both national and international.

Source: BME (Read the entire post here)