MANILA, Philippines - Megaworld Corp., the flagship real estate unit of tycoon Andrew Tan, has obtained the Securities and Exchange Commission’s approval for its proposed P3 billion bond issue, with an oversubscription option of an additional P2 billion.
The bonds will be issued to institutional and retail investors through a general public offering to be managed by BDO Capital & Investment Corp. and Hongkong and Shanghai Banking Corp. Ltd. These bonds, which will be listed at the Philippine Dealing Exchange, will carry a term of five years and six months.
The bond issue was assigned the highest rating of AAA by Credit Rating and Investors’ Services Philippines Inc. The rating reflects the borrower’s strong capacity to repay debt obligations.
Proceeds from the issue will be used to partly fund Megaworld’s capital expenditures over the next three years for the North Bonifacio project. Megaworld has committed to invest at least P15.6 billion over 20 years to develop the 8.38-hectare property into a mixed-use complex.
Megaworld said it is confident about the long-term development potential of the property and remains firmly committed to the Bonifacio Global City as the upcoming premier central business district in the country.
The company’s proposal for the North Bonifacio lots is a mixed-use development of more than 500,000 square meters of gross floor area and is predominantly residential.
With a cash position of P15.7 billion as of end-June this year, Megaworld boasts of its strong capability to carry out large-scale property development projects. It has a successful track record of building self-contained communities under its pioneering live-work-play-learn concept.
In the first half this year, Megaworld reported a 12 percent growth in net income to P2 billion on the back of a 16 percent rise in revenues. Real estate sales accounted for P6.07 billion or 15 percent higher than the year earlier level of P5.28 billion.
Megaworld currently has five townships within Metro Manila, as well as stand-alone projects in the Makati central business district. It has about 275,000 square meters of BPO office space and expects to complete another 60,000 square meters by yearend.
The company is launching five new residential condominium projects this year that are estimated to generate around P12 billion in sales.
Among these projects include Two Central (a prestigious high-rise building located in Salcedo Village that will make available around 400 units); Tower Three in Eastwood City in Libis; Parkside Villas (a seven-cluster community that will rise beside the five-star Marriott Hotel in Newport City in Pasay); The Venice Residences (a seven-tower residential project in Mckinley Hill in Bonifacio Global City); and Morgan Suites Executive Residences (also within the 50-hectare Mckinley Hill township).
Around 80 percent of the company’s sales come from residential projects while 10 to 15 percent come from lease operations.