Alliance Global raises $500 million from bonds

MANILA, Philippines - Alliance Global Group Inc. (AGI), the parent firm of Megaworld Corp., has successfully raised $500 million from the issuance of seven-year dollar-denominated bonds.

In its disclosure to the Philippine Stock Exchange, AGI said the issue was upsized to $500 million from an initial $400 million on strong investor demand, attracting $4 billion worth of orders.

“We are extremely pleased with the response of the investor community on our inaugural bond issue,” AGI chairman Andrew Tan said.

The bonds carried a coupon of 6.5 percent and priced at a yield of 6.625 percent.

UBS Investment Bank was the lead manager and sole bookrunner for AGI’s maiden bond offering.

The money raised will be used to finance AGI’s capital and project expenditures and pay back debt.

Aside from real estate development, AGI has interests in food and beverage, quick-service restaurants and integrated tourism development.

AGI posted net earnings of P3.69 billion in the first half of the year, up 43 percent from the year earlier, on strong sales from its property business. Consolidated revenues rose 22 percent to P21.26 billion, 46 percent of which came from Megaworld Corp. with higher sales from residential projects McKinley Hill, Newport City and Manhattan Garden City. Improving revenues from BPO office rentals likewise boosted AGI’s earnings result.

AGI’s consumer business, through Emperador Distillers and Golden Arches Development Corp. (GADC), contributed 44 percent to total revenues.

Emperador Distillers produces leading brandy labels Emperador and Generoso. In the last few months, the company launched Emperador Light and The Bar flavored alcoholic beverages, both of which are enjoying brisk sales. GADC, on the other hand, is the master franchise holder of McDonald’s in the Philippines.

AGI’s fourth business leg, Travellers International Hotel Group, Inc., contributed equity earnings of P595 million in the first half of the year. Travellers International is the developer and operator of Resorts World Manila (RWM), the country’s first 24/7 integrated tourism estate in Newport City located across Terminal 3 of the Ninoy Aquino International Airport.

Travellers International is a joint venture between AGI and Genting Hong Kong Ltd. (formerly Star Cruises Ltd. of Hong Kong), the third largest cruise line operator in the world and part of Malaysian conglomerate Genting Berhad.

Travellers International will likewise develop Resorts World Bayshore City, to be located within the 90-hectare Bagong Nayong Pilipino Entertainment City Manila.