In the photo from left are China Bank Capital Corporation Managing Director and Head of Origination and Client Coverage Virgilio O. Chua, BDO Unibank, Inc. Senior Executive Vice President Walter Wassmer, BDO Capital & Investment Corporation President Eduardo V. Francisco, Megaworld Corporation Senior Vice President – Business Development and Leasing Jericho P. Go, Megaworld Senior Vice President – Commercial Division Kevin L. Tan, Megaworld Chief Operating Officer Lourdes T. Gutierrez-Alfonso, Megaworld Executive Director Kingson U. Sian, Megaworld Senior Vice President – Treasurer Francisco C. Canuto, PDS Group President and CEO Cesar B. Crisol, and Philippine Dealing & Exchange Corp. President and COO Antonino A. Nakpil,
Tycoon Andrew Tan-led property developer Megaworld Corp. reported brisk take-up of seven-year bonds raised from the local debt market, prompting the company to upsize the offering to P12 billion.
Megaworld reported in a disclosure to the Philippine Stock Exchange on Tuesday that the bonds due 2024, which were priced at 5.3535 percent per annum, were oversubscribed by 2.2 times the base offer of P8 billion.
The company cited strong demand from a wide spectrum of investors ranging from individuals in the retail market to banks, investment funds, pension funds, insurance companies and other corporates. As such, the lead underwriter and sole bookrunner, in consultation with the issuer, fully exercised the P4 billion oversubscription option when the offer period ended last March 21.
This offering marked Megaworld’s return to the local debt market after the issuance of five-year fixed rate bonds in 2009. This also represents the initial tranche of its P30 billion shelf registration of debt securities with the Securities and Exchange Commission.
Under the shelf registration window, securities to be issued in tranches may be registered for an offering to be made on a continuous or delayed basis for a period not exceeding three years. The issuer is allowed to use the same prospectus for various tranches of securities offering under such mechanism. This mechanism is crucial in seeking a good timing to proceed with a planned securities issuance especially when financial markets are volatile.
In the case of Megaworld, proceeds are intended to primarily finance capital expenditures in relation to its investment properties.
Together with its subsidiaries, Megaworld has earmarked P60 billion for group-wide capital outlays this year, mostly to fast-track township developments across the country. This amount is P5 billion higher than the amount spent by the property developer last year.
These bonds are rated ‘PRS Aaa’ by Philippine Rating Services Corp (PhilRatings). This is the highest rating assigned by the local credit watchdog. This rating means that such obligations are deemed of the “highest quality with minimal credit risk” and that the issuer’s capacity to meet its financial commitment on the obligations is deemed “extremely strong.”
BDO Capital & Investment Corp. acted as issue manager, lead underwriter and sole bookrunner for the issuance while China Bank Capital Corp. participated as an underwriter.