Daily Tribune (Philippines)

7-year Megaworld notes raise $350M

This issuance puts Megaworld in a good position to benefit from the eventual recovery of the Philippine economy

- JUN VALLECERA @tribunephl_jun

Andrew Tan-led Megaworld Corp. successful­ly completed a $350-million senior unsecured fixed rate note offering with a coupon of only 4.125 percent, the lowest achieved by a Philippine corporate entity on a seven-year US dollar bond transactio­n.

The notes, which listed on Monday at the Singapore Exchange, are Megaworld’s first senior vanilla bond issuance since 2013 and the lowest ever coupon in the US dollar bond market achieved by the company throughout its corporate history.

Investor calls were conducted in Asia and Europe on 22 July that attracted strong participat­ion and discussion­s among investors centering on an update of Megaworld’s credit and its resilience compared to other Philippine real estate issuers against the backdrop of the ongoing pandemic.

Terms for a new seven-year US dollar benchmark were released the following day after receipt of significan­t indication­s of interest.

Books were in excess of $500-million prior to Asia lunch hour, and reached $1-billion prior to the release of final price guidance. Strong momentum and quality of the orderbook led to a strategic pricing decision at a coupon rate of 4.125 percent.

The quality of the orderbook allowed almost 40 percent of the transactio­n to be allocated to fund managers and asset managers.

Aside from the new record low for a US dollar bond coupon from a Philippine real estate company, the printing of notes was the largest issue size for a US dollar bond offering among real estate companies in the Philippine­s. It also recorded the fastest completion among dollar bond issuances by a Philippine corporate issuer of only 11 days.

“This issuance puts Megaworld in a good position to benefit from the eventual recovery of the Philippine economy. In spite of the pandemic, demand for real estate offerings has remained strong as many still view it as a safe investment. Additional­ly, we foresee that business process outsourcin­g (BPO) companies may need more office spaces because of physical distancing requiremen­ts. This infusion of funds will support our investment pipeline and future land banking initiative­s,” said Kevin L. Tan, chief strategy officer.

Citigroup Global Markets Limited and HSBC Limited were joint global coordinato­rs, joint lead managers and joint bookrunner­s, while Credit Suisse (Singapore) Limited and J.P. Morgan Securities plc were appointed joint lead managers and joint bookrunner­s.

BDO Capital & Investment Corporatio­n was appointed as domestic lead manager.

 ?? AGENCE FRANCE-PRESSE ?? CARGO ship carrying cars making its way on the Yangtze River in Yichang in China's central Hubei province.
AGENCE FRANCE-PRESSE CARGO ship carrying cars making its way on the Yangtze River in Yichang in China's central Hubei province.

Newspapers in English

Newspapers from Philippines