Andrew L. Tan. PHOTO from MEGAWORLD CORPORATION
Property tycoon Andrew Tan-led Megaworld Corp. has raised $350 million from an offshore bond offering that achieved the lowest coupon rate for a Philippine corporate issuer for its tenor.
Megaworld’s 7-year offshore bonds were priced to yield 4.125 percent a year.
The bonds are Megaworld’s first senior “vanilla” bond issuance since 2013.
A plain vanilla or straight bond has no special features compared to other bonds with embedded options. It pays interest at regular intervals, and pays back the principal at maturity.
These offshore bonds will be listed on the Singapore Exchange Securities Trading today.
“This issuance puts Megaworld in a good position to benefit from the eventual recovery of the Philippine economy. In spite of the pandemic, demand for real estate offerings has remained strong as many still view it as a safe investment. Additionally, we foresee that business process outsourcing (BPO) companies may need more office spaces because of physical distancing requirements. This infusion of funds will support our investment pipeline and future land banking initiatives,” Megaworld chief strategy officer Kevin Tan said in a press statement.
Megaworld thus joined a growing number of Philippine corporate issuers tapping the offshore market to take advantage of record-low interest rates now that major central banks across the globe have aggressively eased monetary settings to counter economic fallout from the coronavirus pandemic.
The book-building attracted over $500 million worth of orders prior to Asian lunch hour, and reached $1 billion prior to the release of final price guidance.
Investor calls were conducted throughout Asia and Europe on July 22, which drew strong participation among top investors.” Megaworld said the discussions centered on Megaworld’s credit and its “relative resilience compared to other Philippine real estate issuers against the backdrop of the ongoing COVID-19 pandemic.”
Megaworld said such “strong momentum and quality of the orderbook” had led to a strategic pricing decision at a coupon rate of 4.125 percent.
Almost 40 percent of the new bond deal was given to fund managers and asset managers.
Citigroup Global Markets Ltd. and The Hongkong and Shanghai Banking Corp. Ltd. acted as joint global coordinators, joint lead managers and joint bookrunners, while Credit Suisse (Singapore) Ltd. and J.P. Morgan Securities plc acted as joint lead managers and joint bookrunners.
BDO Capital & Investment Corp. was appointed as domestic lead manager.—DORIS DUMLAO-ABADILLA INQ