DoubleDragon plans up to P9.7-B bond offer

DOUBLEDRAGON Properties Corp. is planning to raise up to P9.7 billion from the issuance of seven-year fixed rate retail bonds, as part of the shelf registration program initially approved by the country’s corporate regulator.

In a statement released on Thursday, the listed property developer said it has already filed a preliminary prospectus with the Securities and Exchange Commission for the second tranche of its fixed-retail bonds, comprising of a base size of P6.5 billion with an oversubscription of up to P3.2 billion.

The bonds form part of a P15-billion shelf registration program, the first tranche of which amounted to P5.3 billion and was issued last December.

“This offering will be a good chance for retail bond investors to participate in a fresh name like DoubleDragon since we do not expect to be tapping the bond market again anytime soon beyond what is remaining on our shelf registration from last December. Once completely taken up, the proceeds are expected to fully cover our development plans through 2020 for both our office and retail portfolios,” DoubleDragon Chief Investment Officer Hannah Yulo was quoted as saying in a statement.

Proceeds of the bonds will be partly used to finance the firm’s capital expenditure for projects that focus on increasing recurring revenue, such as CityMalls, DD Meridian Park, and Jollibee Tower.

In the next three months, DoubleDragon Chairman and Chief Executive Officer Edgar Sia II said they are set to open 10 more CityMalls across the country, and looks to have at least 30 operational malls by the end of the year.

“On top of that, the first phase of our flagship Metro Manila commercial and office project, DoubleDragon Plaza at DD Meridian Park, is set to be completed ahead of schedule within the last quarter of this year. To date, 53,800 square meters of leasable space within the four towers of DoubleDragon Plaza has already been taken up,” Mr. Sia added.

Meanwhile, Philippine Ratings Services Corp. (PhilRatings) maintained the credit rating of PRS Aa for the second tranche bond issue of DoubleDragon, the second highest rating. This rating indicates that the bonds are of high quality and are subject to very low credit risk.

In addition, the debt watcher maintained a positive outlook for the debt issue, which means it holds a potential for its present credit rating to be upgraded in the next 12 months.

“Over the coming years, the company’s revenues are seen to continuously grow on the back of strong sales take-up coming from its real estate development, mall stall units, as well the aggressive development of its CityMall projects. All these will translate to healthy cash levels over the projected period. Profit margins will likewise remain stable,” PhilRatings said.

Earnings of DoubleDragon soared by 280% to P165.7 million in the first three months of 2017, on the back of P649 million in consolidated revenues. Real estate sales and rental income fueled the company’s growth, rising by 66% to P400 million and 129% to P104.5 million, respectively.

Shares in DoubleDragon fell by 70 centavos or 1.41% to P49 apiece at the Philippine Stock Exchange on Thursday.