Posted on April 07, 2011 11:21:50 PM [ BusinessWorld Online ]
MEGAWORLD CORP. yesterday said it will be tapping lenders before July to pay off an older $100-million loan due this year.
The Andrew L. Tan-led developer will issue dollar-denominated corporate notes to refinance debts and fund other expenses, a disclosure filed with the local bourse showed.
“Megaworld authorized the issuance of seven-year US-dollar-denominated corporate notes, which will mature in 2018,” the company said.
“The company intends to use the net proceeds from the issue of the notes to refinance certain of its outstanding indebtedness and for general corporate purposes,” it added.
“The terms and conditions of the notes, including issue value and interest rate, will be finalized at a later date,” the company said.
The new borrowing should help the company buy more time to pay off debts, John T. Hao, investor relations head of Alliance Global’s property arm Megaworld Corp., said yesterday in a phone interview.
“We have an existing debt, which will mature this year: the $100-million US bonds [issued in] 2006,” Mr. Hao said.
Back then, the property firm had borrowed $100 million through an offshore offering of five-year bonds.
He added that the company will tap funds from foreign investors.
As of end-December, Megaworld had P1.31 billion in interest-bearing loans and borrowing due in the next 12 months.
It also had P6.13 billion of loans due in more than 12 months.
Megaworld appointed UBS Ag as lead manager for the note sale.
The notes will be listed in the Singapore Exchange Securities Trading, Ltd., the company said.
It will be the second time that the company will list notes or bonds in the Singapore exchange, Mr. Hao said.
“The overseas market is still attractive given low rates. [Megaworld] might have also identified potential foreign investors,” Astro C. del Castillo, managing director of brokerage firm First Grade Holdings, Inc., said in a phone interview yesterday.
Mr. del Castillo added that issuing dollar-denominated notes to pay maturing dollar debts will allow the company “to remove foreign exchange risks,” Mr. del Castillo said.
The company is currently developing seven projects within Metro Manila including residential developments in Makati and San Juan.
As of end-December 2010, the company boasted of 384,000 square meters of office space in its portfolio.
It is expected to complete another 78,000 square meters of space this year, earlier reports show.
Megaworld profits jumped to P5.085 billion last year from P4.07 billion in 2009 amid robust sales.
Shares were unchanged at P2.31 apiece yesterday. -- Neil Jerome C. Morales
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