DoubleDragon Corporation’s planned bond offering of up to P10 billion has been assigned the highest issue credit rating of PRS Aaa, with a stable outlook, by Philippine Rating Services Corporation (PhilRatings).
The firm is planning a P5.0 billion bond issuance with an oversubscription option of up to P5.0 billion. This represents the first tranche of the Company’s planned three-year P30.0 billion shelf registration Retail Bonds program.
The planned bond issuance is intended to further boost DoubleDragon’s financial position by increasing its cash reserves.
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.
A Stable Outlook, on the other hand, indicates that the assigned rating is likely to be maintained or to remain unchanged in the next 12 months.
PhilRatings said the assigned rating and the corresponding outlook consider DoubleDragon’s clearly-defined and well-executed growth strategy, its experienced management, and its ability to form solid alliances with industry-recognized partners.
Also factored in are the firm’s conservative financial position considering the capital-intensive nature of its business and expectations of improved operating cashflow, backed by increasing rental income.
DoubleDragon expects to generate ample revenues from its 1.3 million sq m of completed projects, as these become mature assets by 2025. As such, operating cash flow is expected to significantly improve over the projected period.
Moving forward, the capital-raising activities are intended to boost the Company’s financial position by strengthening its cash levels.
Earnings growth, in combination with proceeds from the proposed bond issuances, will beef up the Company’s cash levels. Considering this, cash levels will be sufficient to cover future operating and financing needs.
DoubleDragon’s latest retail bond offering is slated for November 2024 and is set to have a tenor of 5.5 Years at an expected interest rate of 8 percent, with the usual minimum denomination of P50,000.
This offering comes after DoubleDragon’s successful return to the Peso retail bond market with the recent issuance of a total of P10 billion retail bonds in the third quarter of 2024.
"Since the cycle of low interest rates has begun, this retail bond offering could be the very last time in many years at 8 percent per annum area.
“This offering also paves the way to accommodate the overflow of retail investors who was not able to participate in the recent retail bonds,” said DoubleDragon Chairman Edgar Injap Sia II.