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Megaworld closes $350-M offering

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MEGAWORLD CORP. has completed the sale of $350-million senior unsecured notes, marking its first senior straight bond issuance in seven years.

The listed property developer said in a statement over the weekend it had closed its Regulation S offering in record time of 11 days. The notes have a seven-year tenor and a coupon rate of 4.125%, the lowest by a Philippine corporation for such notes.

The bonds will be listed at the Singapore Exchange Securities Trading Ltd. on Monday.

“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,” Megaworld Chief Strategy Officer Kevin L. Tan said in the statement.

When it mandated banks to arrange the offering on July 22, Megaworld said the proceeds will be used for general corporate purposes, namely funding capital expenditures (capex), land banking and loan refinancing.

“[W]e foresee that business process outsourcing 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,” Mr. Tan added.

Citigroup Global Markets Ltd. and The Hongkong and Shanghai Banking Corp. Ltd. acted as joint global coordinators, and with Credit Suisse (Singapore) Ltd. and J.P. Morgan Securities plc, as joint lead managers and joint bookrunners for the offering.

BDO Capital & Investment Corp. was tapped as domestic lead manager.

Megaworld is allocating P36 billion for capex this year, down from the original P60 billion, due to the effects of the coronavirus pandemic.

The company’s attributable net income fell 9% to P3.5 billion in the first quarter as its revenues contracted 4% to P551 million.

Shares in Megaworld closed flat on Thursday at P3 each. — Denise A. Valdez





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