DoubleDragon seeks to raise P10B via bond sale

Property developer DoubleDragon Properties Corp. has filed an application with the Securities and Exchange Commission (SEC) to raise up to P10 billion through the sale of bonds.

This will form part of the company’s proposed bond issue of P15 billion to be filed under shelf registration which can be issued within three years.

The proposed bond issuance has obtained a “double A” credit rating from local credit watcher Philippine Rating Services Corp. (Philratings). Obligations rated “PRS Aa” are 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.”

DoubleDragon tapped BPI Capital Corp. and RCBC Capital Corp. as joint lead underwriters and joint lead issue managers, based on the prospectus dated Sept. 21.

The first tranche of the offering is expected to be launched within this year with a base size of P5 billion but with an option to increase by another P5 billion in case of strong demand.

The bonds will be paid at maturity at par on the maturity date unless DoubleDragon exercises early redemption option.

The company plans to list the bonds on the local fixed income trading platform Philippine Dealing & Exchange Corp. (PDex).

Net proceeds will be used for land acquisition, construction and the completion of ongoing high-rise projects like DD Meridian Park, Skysuites Tower and Jollibee Tower as well as for general corporate requirements. Overall, the offering will cover remaining capital outlays to complete DoubleDragon’s targeted leasing portfolio by 2020.

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.

For its part, Philratings said its rating on the proposed issuance 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.”

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 is 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.

“Given the projects that are in DoubleDragon’s pipeline, revenue and net income are expected to improve over the long-term. Furthermore, with synergies to be harnessed from Sia, Tan Caktiong and their companies and the SMIC group, DoubleDragon is in a very good position to carry out its future plans,” Philratings said.