Securities Issuance and Placement Program

As of 2015, Pei, the country’s leading real estate investment vehicle –managed by Pei Asset Management S.A.S.–, was authorized by the Financial Superintendency of Colombia (FSC) to make one or more Ordinary Bonds’ issues through public offerings, under the global ceiling of its Ordinary Bonds Issuance and Placement Program. The Issuance and Placement Program initially had an authorized global ceiling of COP $500,000,000,000, which was later increased, in 2019, to COP $1,500,000,000,000.

With the two Ordinary Bonds’ issues made in 2018 and 2019, each for COP $500,000,000,000, with oversubscription levels of 1.9x in the 2018 issue and 1.6x in 2019, PEI has structured an issue curve that has been well received by the market and diversified its financing sources and conditions. The terms of the short, medium, and long-term series issued range from 3 to 25 years, aligning the debt’s term with the agreements’ terms.

In line with the goal of incorporating sustainable and responsible investment practices within its securities issues, on September 23, 2020 PEI obtained the FSC’s authorization to modify PEI’s Issuance and Placement Program so as to include the possibility of issuing Green Bonds and Commercial Papers under its global ceiling.

Based on this modification, PEI’s Debt Securities Issuance and Placement Program currently has a varied range of different securities, financial conditions, and placement terms to manage its capital structure.

Green Bonds are a type of Ordinary Bond whose proceeds are exclusively used to finance or refinance, in part or in full, eligible green projects, whether new or existing. In addition to the above, Green Bonds must comply with the International Capital Market Association’s standards and principles, namely the “Green Bond Principles”.

In turn, Commercial Papers are debt securities with terms not exceeding one year, counted from their issuance date to their maturity date, secured with all of the issuer’s assets –whether present or future–, and with no particular encumbrances affording them a special priority upon other creditors.

Among the benefits of having an Issuance and Placement Program is the possibility of taking advantage of possible liquidity windows in the stock market during certain periods of time. In Jairo Corrales’ words (Pei Asset Management S.A.S.’s president): “Access to financing through the capital market has been a very valuable tool in optimizing Pei’s capital structure. This increase of the ceiling and the inclusion of both green bonds and commercial papers will allow us to continue seizing opportunities to access this type of credits, in line with our sustainability goals and the time frames associated to our business model”.