MEGAWORLD CORP. is planning to tap the offshore bond market, announcing on Monday a series of road shows in Singapore and Hong Kong.
In a disclosure to the stock exchange, the Andrew L. Tan-led firm said it has engaged American investment bank and financial services firm J.P. Morgan as sole book runner “to arrange a series of fixed income investors meetings” in Singapore and Hong Kong. The road shows will start today (April 3).
The listed property developer is looking to issue Regulation S dollar-denominated securities after the road shows.
“A proposed Regulation S USD denominated securities offering may follow, subject to market conditions,” Megaworld said.
Regulation S refers to securities that are not required to be registered under the United States Securities Act, and may be offered in the Eurobond market. The securities may not be offered or sold in the US.
This offering will mark Megaworld’s return to the offshore bond market after five years. The company had raised $250 million from an offshore bond sale in 2013. The 10-year bonds had a coupon rate of 4.25% per annum, and were listed at the Singapore Exchange Securities Trading Ltd.
Prior to this, Megaworld also raised $200 million worth of seven-year bonds in the offshore bond market in 2011. The issuance had an interest rate of 6.75% per annum.
The company has committed to spend P60 billion in capital expenditures this year, the bulk of which will go to the development of more residential, office, and commercial projects inside its townships.
Megaworld currently has 23 integrated estates across the Philippines, including the Maple Grove in General Trias, Cavite, Capital Town in San Fernando, Pampanga, and McKinley Hill, McKinley West, Uptown Bonifacio, and Forbes Town all in Taguig City.
Residential sales account for 70% of Megaworld’s revenues, while the rest are from office and commercial leasing, and the leisure segment.
By 2020, the firm targets to book P20 billion in annual rental income, split between offices and commercial space leasing. To achieve this, Megaworld is ramping up the development of lifestyle malls to bring its total network to 28 from the current 15 in the next two years.
Megaworld delivered a 12.7% increase in its net income attributable to the parent to P12.8 billion in 2017, on the back of a 7.7% climb in revenues to P50.4 billion. The firm is the property arm of Alliance Global Group, Inc., which also has core interests in liquor, gaming, and quick service restaurant.
Shares in Megaworld climbed 10 centavos or 2.13% to close at P4.79 apiece at the Philippine Stock Exchange on Monday. — Arra B. Francia