Megaworld completes $350 million bond offering

MANILA, Philippines — Megaworld Corp., the Andrew Tan-led property giant, has successfully completed its $350-million dollar-denominated senior unsecured fixed rate notes offering, proceeds of which will be used for general corporate purposes, which include financing capital expenditure, land banking and refinancing of loans.

“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. Additionally, 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,” said Kevin Tan, Megaworld chief strategy office.

Megaworld’s seven-year bonds fetched a coupon rate of 4.125 percent, the lowest coupon achieved for a Philippine corporate entity on a seven-year US dollar public bond transaction.

Prior to the issuance, Megaworld conducted investor calls throughout Asia and Europe on July 22, achieving strong participation and discussions among top investors, which centered on an update on the company’s credit and its relative resilience compared to other Philippine real estate issuers against the backdrop of the ongoing COVID-19 pandemic.

Terms for a new seven-year USD benchmark were released the following day after receipt of significant indications of interest.

The company received orders in excess of $500-million prior to Asia lunch hour, and up to $1-billion prior to the release of final price guidance. Strong momentum and quality of the orderbook led to a strategic pricing decision of a coupon rate of 4.125 percent, Megaworld said.

The notes, which will be listed on the Singapore Exchange Securities Trading Limited today, are considered to be Megaworld’s first senior plain or straight bond issuance since 2013, and the lowest ever coupon in the US dollar bond market achieved by the company throughout its corporate history.

The quality of the orderbook allowed almost 40 percent of the transaction to be allocated to fund managers and asset managers.

Megaworld said it recorded the fastest completion among dollar bond issuances by a Philippine corporate issuer of only 11 days aside from the new record low for a dollar bond coupon from a Philippine real estate company.

The transaction was also among the largest issue size for a dollar bond offering among real estate companies in the Philippines.