The bond deal was priced Friday night near the earlier-stated indicative rate and was priced to yield 6.875 percent, said Lauro Baja, managing director for the Philippines at UBS, which arranged the deal.
The offering by Megaworld, an unrated issuer in the overseas debt market, was oversubscribed even without having to conduct a road show, Baja said. “This indicates investors’ confidence in Andrew Tan’s group,” he said.
Baja said about half of the debt issuance was taken up by Asian investors, mostly domiciled in Hong Kong and Singapore. The rest was snapped up by various global funds.
Megaworld’s return to the bond market was timely given the recent resurgence of global investor appetite on emerging market assets.
Megaworld last tapped the offshore bond market in July 2006 with a $100-million, five-year debt issue.
The lengthening of the maturity to seven years in this latest offering, Baja explained, showed how investors were increasingly comfortable with Megaworld’s creditworthiness. Baja also noted that in a span of a single week, Tan’s group raised $450 million in fresh funds in a mix of debt and equity deals.
Megaworld’s parent Alliance Global Group Inc. earlier sold P9.7 billion in treasury-held shares through a private equity deal with mostly foreign investors. Some of the shares sold were owned by Megaworld itself. UBS likewise arranged the previous equity deal.
Megaworld’s corporate notes will be listed on the Singapore Exchange Securities Trading Ltd. (SGX).
The property firm intends to use the net proceeds from the issue of the notes to refinance some of its outstanding indebtedness and for general corporate purposes.
The Megaworld group comprises foremost high-end property brand Megaworld and its associates Empire East Land Holdings and Suntrust Properties, which focus on medium-cost and affordable housing, respectively. The group is the developer of five live-work-play communities in Metro Manila—Eastwood City in Quezon City; McKinley Hill, McKinley West and the upcoming Bonifacio Uptown in Fort Bonifacio; and Newport City in Pasay City.
Over the last two decades, the Megaworld group has built more than 200 residential and office buildings with a total floor area of around 5.4 million square meters to become one of the country’s leading property developers.
source: Philippine Daily Inquirer, April 11 2011
