Megaworld raises $350 M from notes offer

Published August 2, 2020, 10:00 PM

by James A. Loyola

Megaworld Corporation, the property development arm of the Andrew Tan group of companies, has successfully raised $350 million from its Reg S Registered US dollar-denominated Senior Unsecured Fixed Rate Notes offering.

In a statement, the firm said the notes have a 7-year tenor and a coupon rate of 4.125 percent, the lowest coupon achieved for a Philippine corporate entity on a 7-year US dollar public bond transaction.

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

He added, “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.”

The Notes, which will be listed on the Singapore Exchange Securities Trading Limited today,  August 3, 2020, are considered to be 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 throughout Asia and Europe on July 22, 2020 and the terms for a new 7-year USD 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 US$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 USD bond coupon from a Philippine real estate company, the printing of notes was among the largest issue size for USD bond offering among real estate companies in the Philippines.

It also recorded as among the fastest completion of USD bond issuances by a Philippine corporate issuer at only 11 days.