(Source: The Manila Times | 24 September 2016)
Listed property developer DoubleDragon Properties Corp. said it will issue P15 billion in retail bonds to fund the development of its projects for next year.
In a disclosure to the Philippine Stock Exchange on Thursday, DoubleDragon said its board of directors has approved the offering and issuance of 10-year, fixed-rate retail bonds due 2026.
The company said the bonds will be issued in several tranches.
“The retail bonds will be filed under a shelf registration that allows its issuance within a period of three years,” the disclosure said.
DoubleDragon said it intends to offer an aggregate principal amount of up to P5 billion with an oversubscription option of up to P5 billion for the first tranche of the shelf registration program.
“Any remaining balance of the aggregate principal amount of the retail bonds, including any amount remaining if the over-subscription option is not or is not fully exercised, shall be lodged under a shelf registration and will be raised in future tranches,” the company said.
Philippine Rating Services Corporation (PhilRatings) assigned an issue credit rating of PRS Aa to the bond issuance, which denotes high quality and very low credit risk, the company said.
“The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” it said.
Bulk of the proceeds of the bond issue will be used to fund the capital expenditures of the firm’s core recurring revenue-focused projects, particularly its CityMalls developments, DD Meridian Park and the Jollibee Tower.
“We expect that this round of fundraise will fully cover the total capex requirements of the Company to complete [the]2020 goal of 1 million square meters of leasable space,” DoubleDragon chairman 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 Double Dragon Plaza in DD Meridian Park and Jollibee Tower in Ortigas CBD, both of which are expected to be completed within 2018,” Sia added.
Earlier this year, DoubleDragon issued 100 million preferred shares with a par value of P100 per share equivalent to P10 billion.
The company reported net income of P144 million in the first half of this year, a 16 percent increase from the P124 million posted in the previous year.
– By Catherine Talavera