Trump Tower is protected from IP litigation

Newland International Properties Corp. (BVP: NEWL) has filed a US$200,000 bond with a Panama City circuit court to prevent damages from a possible lawsuit by the Jumeirah Group - owners of the sail-shaped Burj Al-Arab hotel in Dubai. The order also bars Jumeirah from continuing to send disparaging notes to Panama city permit authorities. This protective order is allowed by Judicial Code when there is a reasonable fear of damages from an unfounded lawsuit.

Law 15 of 1994 on Copyright does protect architectural designs. However, the law also states that the architect is the owner of the design, not the builder who is merely granted a license. Newland declared to the media that it received the plans from Upper Deck Properties. According to the original prospectus filed with the Panama Stock Exchange, Upper Deck is an affiliate of Newland. The original design was prepared by Colombian architects Arias, Serna & Saravia (an affiliate of Newland) for Upper Deck, which also has 2 members in the Newland board:

En el 2006, nosotros adquirimos el esquema arquitectónico preliminar para el proyecto del Trump Ocean Club de Upper Deck Properties, S.A. o “Upper Deck”, nuestra afiliada. Este esquema arquitectónico básico y preliminar fue originalmente preparado por Arias, Serna & Saravia, nuestra afiliada, e incluye los diseños y mercánica básicos para el proyecto y sus detalles arquitectónicos y especificaciones. (page 63) Upper Deck, una sociedad comercial incorporada de acuerdo a las leyes de Costa Rica y nuestra afiliada, contrató a Arias, Serna & Saravia, su afiliada, para el desarrollo de los planos y especificaciones del Trump Ocean Club en base a un contrato principal para diseño arquitectónico fechado al 30 de agosto de 2005. Subsecuentemente, nosotros adquirimos de Upper Deck los planos y especificaciones por el esquema básico y proyecto arquitectónico preliminar de Trump Ocean Club, en base a un contrato de compra venta de planos y especificaciones fechado al 3 de febrero de 2006.(80) Nuestra junta directiva esta integrada por 3 miembros, uno designado por Roger Khafif y dos elegidos por Upper Deck. (85)

Newland has not listed the matter as a material event in their Panama Stock Exchange NEWL listing.

More in http://mensual.prensa.com/mensual/contenido/2008/04/28/hoy/herald/1335288.html
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Trump Tower goes public

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.

Nombre	Sector
Newland International Properties Corp.	Bienes Raíces

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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Latin America's real estate Panamania

Once a sleepy Latin American capital, Panama City has become one of the world's hottest real estate markets. How long can the fever last?

By Eliza Barclay, Fortune Magazine

July 3 2007: 3:44 AM EDT

(Fortune Magazine) -- Off in the distance, where Panama Bay becomes the Pacific, container ships loaded with merchandise bound for the U.S. bob in the haze. Closer in, a flock of construction cranes hovers over densely clustered high-rises. Fourteen stories below, on Balboa Avenue, cars inch along, their windows sealed tight against the sweltering heat.

The view belongs to Jim and Imogene Buckley, a retired couple from Greensboro, Ga., who purchased their one-bedroom condo a few years ago, before it was built, for $140,000. The apartment, which they'll use every other winter month, alternating with another couple from Wyoming, gives them a ringside seat overlooking one of the world's hottest real estate markets.

Panama looked like a good investment and a place to have a good time," says Jim Buckley, 76, a former U.S. Air Guard pilot, while admiring the view. "You don't need a lot of sense to see that it will increase in property value."

Panamania - See the boom

Panama City is in the midst of an unprecedented real estate boom that is transforming the skyline of this once-sleepy Latin American capital. More than 30,000 units worth about $5.7 billion have come on the market since last July, according to Paul McBride, CEO of Prima Panama, a real estate marketing company.

That's a lot of condos in a country where the total economy measured $16.2 billion last year. And the boom shows no sign of abating: Among the showiest of the new projects is the Ice Tower, a 106-story luxury apartment building and Hilton Hotel complex that will be the tallest building in Latin America when it is completed in 2011. Even Donald Trump has a project on the boards.

Part of what's driving growth in Panama City, where the median apartment price recently surpassed the median home price in the U.S., is a wave of retirees from North America, like the Buckleys, looking for a place in the sun. So far, few Americans have moved permanently, but many are buying second homes or just plain speculating. Europeans are here too, and there's plenty of new wealth in Latin America, in places like Venezuela and Colombia, looking for a safe haven.

Construction workers on the Punta Pacifica construction site.

Call it Panamania. Is it a bubble in the making, or the rise of a new Miami? Despite the abundance of cranes around Panama City, only about 10 percent of the projects being sold are under construction, says McBride. "We're not even seeing the construction boom in Panama yet," he says. "This place will look like Manhattan if all these projects come to fruition."

Certainly the decision to spend $5.2 billion to double the width of the Panama Canal, the country's biggest source of revenue, is a sign of Panama's prosperity. The addition of a new lane and a new set of locks will allow post-Panamax container ships, the world's largest, to pass through the canal. "The expansion of the canal has woken up the curiosity of a lot of people," says Saul Faskha, the local developer of the Ice Tower and one of Panama's biggest boosters.

7 Up-and-coming destinations

Panama's economy has been growing at breakneck speed - 8.1 percent last year, compared with 6.4 percent in 2005 - and the government finished the year with a surplus of $576 million. Exports from Panama's free-trade zone, the second largest in the world after Hong Kong's, have helped fuel the growth. The U.S. Congress is expected to sign a free-trade agreement with Panama sometime this year, which should boost exports even further. And several multinational corporations have moved or are moving their Latin American headquarters to Panama City, including Caterpillar, Sanofi-Aventis and Samsung.

Consumer spending has also swelled, the banking sector is strong, and 40,000 new jobs were created last year. All that is good news for the government of Martín Torrijos, son of former strongman Omar Torrijos, who ruled Panama from 1968 to 1981.

Unlike his father, the younger Torrijos came to power in a fair election in 2004. And unlike his father, Torrijos doesn't have to deal with a U.S.-occupied Canal Zone: Panama took control of the canal in 1999 and has proved adept at running it. Gone, too, are the U.S. troops that toppled another dictator, Manuel Noriega, a corrupt former general who is nearing the end of a 17-year U.S. prison term for cocaine trafficking.

Rumors that Noriega might want to return to Panama have cast a cloud over an otherwise bright mood. But the country, 36 percent of whose population lives in poverty, has other problems to deal with. For one thing, says Torrijos, during a recent trip to a small mountain town, "there is a huge demand now for a skilled workforce."

Indeed, a labor shortage has already helped slow construction activity in Panama City, and developers are concerned that other factors may hinder the completion of projects. Materials and equipment are in high demand, from rebar to cement to earthmovers. The construction frenzy has also put a strain on the city's infrastructure, and the government is struggling to build enough roads, water-treatment facilities and other projects.

One big problem: All of Panama City's sewage is dumped into the bay, and a treatment plant won't be completed until 2009. "Panama has grown very, very fast - we didn't anticipate this," says Ubaldino Real, Minister of the Presidency. "The government has had to take out more money to be able to act much faster to build roads."

But that hasn't dampened the enthusiasm of people like José Manuel Bern, director of sales and projects for Empresas Bern, one of Panama City's oldest and largest developers. The company's Bayfront Tower, completed in April, is among the first buildings designed for foreigners - distinct from those built for locals because they have balconies but no maid's rooms. Bern says that he sold nearly all the apartments in the tower four years ago, and that units that originally went for $130,000 now sell for $330,000. "We used to be very focused on the local market," he says, "but now I sell to a foreigner every other day."

Prima Panama's McBride and others are worried that the building boom is ultimately going to exceed demand. "I do not think there will be sufficient buyers to absorb capacity, if in fact capacity is delivered," McBride says. "When you see prices going up, driven by speculative investors, that points to a bubble."

Try telling that to Adolfo Olloqui, a Spanish developer whose company, Grupo Olloqui, is building what will be one of the tallest luxury towers in downtown Panama City, the 77-story Palacio de la Bahia. "Panama is the Miami of the future," he says. "With the visa problems in the U.S., South Americans, Central Americans and North Americans will want to come here to do business and to live."

Or try telling it to the Buckleys, who at least have a splendid view from their new Panama perch.

Pictures and more in http://money.cnn.com/magazines/fortune/fortune_archive/2007/07/09/100122336/index.htm