Just two months after its P6 billion bond issuance, property developer DoubleDragon Corporation is planning to raise P4 billion through the offering of bonds from the second tranche of its P10 billion shelf registered bonds program.
For this planned issuance, Philippine Rating Services Corporation (PhilRatings) said it has assigned its highest Issue Credit Rating of PRS Aaa, with a Stable Outlook.
The first tranche of the shelf, which amounted to P6.0 billion, also has an outstanding Issue Credit Rating of PRS Aaa, with a Stable Outlook. It was issued by DoubleDragon last July 16, 2024.
Obligations rated PRS Aaa are of the highest quality with minimal credit risk and 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 DoubleDragon’s bonds were assigned the highest rating and a stable outlook because of its clearly-defined and well-executed growth strategy as well as its experienced management, and its ability to form solid alliances with industry-recognized partners.
Also taken into consideration is the firm’s conservative financial position, considering the capital-intensive nature of the Company’s business, and expectations of improved operating cashflow, backed by increasing rental income.
DoubleDragon is a joint venture between two of the Philippines’ highly-successful fast food entrepreneurs: Edgar “Injap” Sia II (founder of Mang Inasal) and Tony Tan Caktiong (founder of Jollibee).
The company is in the business of real estate development, and has four principal business segments: retail leasing, office leasing, hospitality, and industrial leasing.
Since the start of its operations in 2010, DoubleDragon has successfully expanded and diversified its asset portfolio. Its investment property portfolio grew to over 1.3 million square meters (sqm) as of end-March 2024.
DoubleDragon has provincial community malls located in Luzon, Visayas, and Mindanao, office buildings in Metro Manila, as well as hotels and warehouse complexes nationwide.
Moreover, the company made significant strides in expanding its business overseas through its hotel brand, Hotel101.
DoubleDragon has set a new target of increasing its portfolio to 2.4 million sqm of gross floor area (GFA) by 2030, spread across its four core business segments: 30 percent in retail, 15 percent in office, 20 percent in hospitality, and 35 percent in industrial leasing.
To achieve these targets, DoubleDragon aims to grow its hospitality and industrial leasing segments.
Moving forward, DoubleDragon expects its debt level to decline as the Company continues to generate positive cash from operations, while its cash reserves build up.
Operating cashflow is forecast to be positive over the projected period on account of increased recurring income from leasing operations.
Future funding requirements for financing and investing needs are projected to primarily come from operating cash and cash reserves.