The Securities and Exchange Commission has approved the plan of fast-growing property developer DoubleDragon Properties Corp. to raise as much as P15 billion from a fresh offering of long-term retail bonds.
DoubleDragon intends to initially offer the first tranche of 10-year retail bonds with a base offering of P5 billion with an oversubscription option of up to P5 billion in early December, based on a disclosure to the Philippine Stock Exchange on Friday.
The full offering amount of P15 billion will be filed under a shelf registration that allows the issuance within a three-year window.
The shelf registration mechanism under the Securities and Exchange Commission allows an issuer like DoubleDragon to register and sell under the same prospectus and other regulatory filing requirements a certain volume of securities that the issuer does not intend to use right away.
The bulk of the proceeds will be used to finance the construction of projects that will generate recurring revenues for DoubleDragon: CityMalls, DD Meridian Park and Jollibee Tower.
“We expect that this fund-raise will fully cover the total capex (capital expenditure) requirements of the company to complete the 2020 goal of one million square meters of leasable space,” DoubleDragon chair and chief executive officer Edgar Sia II said in a statement.
“Majority of the proceeds will be deployed in our projects within 2017 as by 2018 we expect to already have substantial rental revenues from our provincial community mall chain, CityMalls and our Metro Manila office projects such as DoubleDragon Plaza in DD Meridian Park and Jollibee Tower in Ortigas CBD, both of which are expected to be completed within 2018,” he added.
Any remaining balance which will not be exercised will be lodged under the shelf registration and issued in future tranches.
The bonds were rated by credit watcher Philippine Rating Services Corp. “PRS Aa,” which deems the bonds as “high quality” and “subject to very low credit risk.”
Under this rating, the issuer’s capacity to meet financial commitment on the obligation is deemed “extremely strong.”
DoubleDragon intends to roll out a chain of 100 community malls under the brand “CityMalls” through 2020, mostly in the “underserved” markets of Visayas and Mindanao. The shopping mall business is under its flagship subsidiary CityMall Commercial Centers Inc. (CMCCI).
Tycoon Henry Sy-led SM Investments Corp. has a 34-percent stake in CMCCI.
Previously known as Injap Land Corp., DoubleDragon was started by Sia—who founded the Mang Inasal Chicken Bacolod restaurant chain—as a subsidiary of holding company Injap Investments Inc.
HoneyStar Holdings of Jollibee Foods Corp. founder and former chief executive officer Tony Tan Caktiong afterwards bought into the company, which thus became an equal venture before it became a public company. —DORIS DUMLAO-ABADILLA