Some foreigners prefer to give out a check to some unknown developer who claims to own several miles of beachfront without conducting any due diligence but at the same time find the Panama Stock Exchange or BVP (Bolsa de Valores de Panama) to be too risky - go figure! The BVP lists Panama companies which have been around for decades, with the added benefit that they have to submit quarterly reports to the public and report material facts (even if founding majority shareholders dislike the added openness of being listed). This is the exception to the general rule of ice-cold secretive Panama corporations which have given bad fame to the country.
Unlike tourism and reforestation incentives which require to go through miles of red-tape to have their tax-free status approved, dividends and return from securities listed in the BVP are free of Panama tax.
Shares of holding companies of Pribanco, Banistmo, Continental, Cemento Panama and others were listed at prices around $20 for years and eventually their holders received tender offers for US$40 or more, which gave profits to those willing to hold on to their positions. Not much volatility to profit from, but at least gains are free from Panama taxes.
Now Newland International Properties, Corp. (Trump Ocean Club) (BVP: NEWL) has issued US$220m in 9.5% Secured Notes Due 2014 with BVP. Newland is controlled by Ocean Point Development Corp., a Panama-based holding company whose majority shareholder is investor Roger Khafif. Newland also has Bogota-based Arias Serna y Saravia SA, a Colombian real estate developer, and Espacios Urbanos SA as partners.
The prospectus and other relevant information for NEWL and other publicly-held companies in Panama can be downloaded from the Bolsa website.
Unlike tourism and reforestation incentives which require to go through miles of red-tape to have their tax-free status approved, dividends and return from securities listed in the BVP are free of Panama tax.
Shares of holding companies of Pribanco, Banistmo, Continental, Cemento Panama and others were listed at prices around $20 for years and eventually their holders received tender offers for US$40 or more, which gave profits to those willing to hold on to their positions. Not much volatility to profit from, but at least gains are free from Panama taxes.
Now Newland International Properties, Corp. (Trump Ocean Club) (BVP: NEWL) has issued US$220m in 9.5% Secured Notes Due 2014 with BVP. Newland is controlled by Ocean Point Development Corp., a Panama-based holding company whose majority shareholder is investor Roger Khafif. Newland also has Bogota-based Arias Serna y Saravia SA, a Colombian real estate developer, and Espacios Urbanos SA as partners.
The prospectus and other relevant information for NEWL and other publicly-held companies in Panama can be downloaded from the Bolsa website.
| Nombre | Sector | ||||
 Newland International Properties Corp. | Bienes Raíces |
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Fitch rated the notes as a BB+, pointing out that credit's strengths for this issuance include:
--Presales amounting to 65% of total expected units have already been recorded. Purchasers pay 30% of the sale price at signing with the remaining 70% due in full upon delivery of the unit.
--The development of Trump Ocean Club will be the singular focus of Newland and strict covenants are in place prohibiting dividends or cash releases to the developer. The incurrence of additional debt will also be limited. All cash collections and payments for operating expenses and construction, as well as debt service, will be highly regulated by the priority of payments waterfall clearly defined in the indenture.
--A portion of bond proceeds will serve to fund a construction escrow account sized to cover the remainder of all remaining construction costs. Draws from this Trustee controlled account can only occur after the independent engineer provides certification that all work has been completed according to plan and that costs are within budget. In addition, draws from the account must be backed by 125% in eligible receivables arising from the sale of units.
Development projects of this scope do contain various risks. Construction risk represents one of the main risks in addition to the liquidity concerns that could arise if sales velocity decreases. Sales at Trump Ocean Club also are correlated to global real estate markets. Proceeds from the $220,000,000 issuance will be used to fund a construction escrow account, fund a six-month debt service reserve account, and repay existing debt. Final maturity of the notes is seven years with a three and a half year interest only period and semiannual payments.
Fitch Rates Newland International Properties' (Trump Ocean Club) Senior Secured Notes 'BB'
Newland, Builder of Trump Panama Resort, to Offer Dollar Bonds By Guillermo Parra-Bernal
Issuer website
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