By Zinnia B. Dela Peña (The Philippine Star) Updated September 23, 2009 12:00 AM
MANILA, Philippines - Megaworld Corp., the upscale property development firm of tycoon Andrew Tan, plans to issue as much as P5 billion worth of five-year fixed rate bonds to raise funds for its proposed projects, the company told the Philippine Stock Exchange yesterday.
The principal amount of the bond offer is worth P3 billion but Megaworld said the issue size can be increased to P5 billion, depending on market demand.
The bonds, which will have a term of five years and six months, have been assigned the highest AAA rating by Credit Rating & Investors Services Philippines Inc., reflecting the strongest capability of the company to repay its debt obligations.
BDO Capital & Investment Corp. and HSBC are the designated joint lead managers and bookrunners for the issue.
Proceeds from the offering will be used to partially fund capital expenditures for Megaworld’s proposed central district development in Bonifacio Global City, as well as for general corporate purposes.
Megaworld earlier announced it was allotting at least P15.6 billion over the next 20 years to develop an 8.38-hectare government property located at the northern district of Bonifacio Global City into a mixed-use complex.
The company topped the offer of its lone challenger, Robinsons Land Corp., with a final bid of P37,603.69 per square meter or a total of P3.151 billion, slightly higher than RLC’s offer of P37,597.86 per square meter and even 13 percent higher than its original bid of P2.78 billion.
Under Megaworld’s proposal, the state-run property owner Bases Conversion Development Authority will be entitled to an upfront cash of P1.062 billion and annual revenues of P306,616.325 for 12 years.
Megaworld said it is optimistic about the long-term development potential of the property and remains firmly committed to the Bonifacio Global City as the next 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 a 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 net income of P2 billion, up 12 percent from the same period a year ago. Consolidated revenues rose 16 percent to P8.73 billion, with real estate sales accounting for P6.07 billion or an increase of 15 percent from 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 estimated to generate around P12 billion in sales.
Among these projects include Two Central (a prestigious high-rise building 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 its residential projects while 10 to 15 percent come from lease operations.
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