Tycoon Andrew Tan-led Megaworld Corp. has debuted into the offshore perpetual bond market with a $200-million issuance that was priced to yield 5.375 percent a year.
With the offering oversubscribed by about twice the base offer, Megaworld was able to tighten pricing by 62.5 basis points from initial price guidance of 6 percent a year.
“This was essentially flat to the tightest Philippine fixed-for-life instrument in the secondary market, implying no new issue premium,” Megaworld said in a disclosure to the Philippine Stock Exchange.
“The tight pricing reflected the consistent and positive feedback investors had about the credit profile and track record of Megaworld,” it said.
While the bonds are perpetual, they will have synthetic maturity of five years as the issuer will have the option to redeem the bonds after that period.
The issuance represents the first ever perpetual bond from Megaworld and its return to the international bond market after five years. During the two-day roadshow in Hong Kong and Singapore, Megaworld reported “strong anchor demand, which allowed accelerated pricing.”
The notes are unrated and will be listed on Singapore Exchange Securities Trading Ltd.
Proceeds from the offering will be used for general corporate purposes and refinancing of existing debts.
J.P. Morgan is the sole bookrunner for this transaction.
The bonds fall under US Regulation S—often referred to as “Reg S”—which are bonds or stocks that are issued in the Eurobond market for international investors. They may not be offered, sold or delivered in the United States.
The last time Megaworld had tapped the offshore bond market was in 2013, when it raised $250 million from a deal that achieved the lowest yield among 10-year dollar corporate bond deals carved out of the Philippines.