By James A. Loyola
Megaworld Corporation has kept the highest PRS Aaa rating for its P12-billion bonds issued two years ago sa the real estate sector is seen to continue growing due to rapid urbanization and expansion of the BPO sector.
In a statement, Megaworld said Philippine Rating Services Corporation (PhilRatings) assigned its highest rating to the said security on the back of the property company’s robust liquidity, sound capitalization, and strong management, as well as favorable industry outlook.
Megaworld’s Series B fixed rate bonds were priced at 5.3535 percent per annum and will mature in 2024.
The company made an initial offer of P8 billion upon announcing the debt-raising activity, but due to strong demand from a wide spectrum of investors ranging from individuals in the retail market to banks, investment funds, pension funds, insurance companies and other corporates, it fully exercised the issue’s P4-billion oversubscription option.
Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.
PhilRatings said growth in recurring income streams from Megaworld’s expanding leasing portfolio will support the company’s robust liquidity position, going forward.
“Indications are for Megaworld to be able to meet its target recurring income of P20.0 billion by 2020, given the high occupancy levels of its office and commercial buildings,” it noted.
PhilRatings added that, rental portfolio will continue to grow, and reach 2 million square meters (sqm) by end-2020. Strong internal cash generation and declining total debt will keep liquidity healthy, going forward.
The Philippine property market is expected to continue its growth, driven by rapid urbanization, increasing employment by the BPO sector, higher disposable income, stable overseas Filipino (OF) remittances, and growing real estate investments.
International and domestic players have been heavily investing in the market, recognizing its opportunities. Demand for all sectors – residential, commercial, retail and hotels – is expected to be sustained.