PROPERTY developer DoubleDragon Properties Corp. is debuting on the local bond market with up to P10 billion offering this year, an issuance that has obtained a “double A” credit rating from local credit watcher Philippine Rating Services Corp. (Philratings).
In a press statement, Philratings said this would be part of DoubleDragon’s proposed bond issue of P15 billion which would be filed under a shelf registration that allows its issuance within a period of three years.
Proceeds are expected to cover the company’s remaining capital outlays to complete its targeted leasing portfolio by 2020.
Obligations rated PRS Aa are of deemed of “high quality” and “subject to very low credit risk.” The borrower’s capacity to meet its financial commitment on the obligation is deemed “extremely strong.”
PRS Aa is the second highest rating category on PhilRatings’ existing credit rating scale after PRS Aaa.
Philratings said the rating reflected the following factors: DoubleDragon’s “clear and well-planned growth strategies; its strong alliance with its partners, as well as the expected buildup of the company’s recurring revenue base.”
DoubleDragon intends to initially offer P5 billion of retail bonds with an oversubscription option of an additional P5 billion before the year ends, Philratings said. This is DoubleDragon’s first time to tap the public bond market.
The property developer led by Mang Inasal founder Edgar “Injap” Sia II and Jollibee founder Tony Tan Caktiong plans to build a leasable portfolio of one million square meters by 2020 in preferred industries, such as provincial retail and Metro Manila office space. The company was listed on the Philippine Stock Exchange in April 2014.
SM Investments Corp., one of the leading conglomerates in the country, has a 34 percent stake in DoubleDragon subsidiary CityMall Commercial Centers Inc. (CMCCI) which developing community malls in second- and third-tier cities across the Philippines under the “CityMall” brand. DoubleDragon aims to build 100 CityMall branches by 2020.
Apart from its existing residential projects and CityMall expansion, DoubleDragon is also developing two major office and commercial projects in Metro Manila: a 4.8 hectare prime commercial block at the entrance of the Bay Area and a 40-storey Grade A office Tower in the the Ortigas business district.
“Given the projects that are in DoubleDragon’s pipeline, revenues and net income are expected to improve over the long-term. Furthermore, with synergies to be harnessed from Mr. Sia, Mr. Tan Caktiong and their companies and the SMIC group, DoubleDragon is in a very good position to carry out its future plans,” Philratings said.
“While Mr. Sia’s and Mr. Tan Caktiong’s experience is largely in the fastfood sector, growth in this industry is also mainly anchored on finding suitable property locations that will allow their companies to tap a bigger portion of the market,” the credit watchdog said.