Investors gobble up Megawide’s bond sale

MANILA, Philippines — Investors gobbled up the fixed-rate bond offering of Megawide Construction Corp.

Megawide chairman Edgar Saavedra said strong investor demand allowed the company to complete a successful capital raising campaign.

“Amid the global tension and local developments, the strong take up of our maiden bonds reflects the investing community’s continued trust and confidence in Megawide’s strategic objectives and long-term direction,” Saavedra said.

The company successfully raised P4 billion from the issuance of fixed-rate bonds including the P1 billion oversubscription option as tenders reached P6.71 billion, translating to an oversubscription of 2.24 times the base offer of P3 billion.

The bonds consist of Series A (P1.6 billion maturing in 3.5 years from issue date at a rate of 6.9506 percent) and Series B (P2.4 billion maturing in five years from issue date at a rate of 7.9663 percent).

Net proceeds of the fixed-rate bonds will be used by Megawide primarily to refinance its short-term debts, fund its capital expenditures and other general corporate requirements.

RCBC Capital Corp. and SB Capital Investment Corp., the joint issue managers, attributed the robust investor interest to Megawide’s growth story.

“Megawide’s long-term growth story, anchored on its pivot to developmental infrastructure, and financial management roadmap sit well with investors. We believe this is one of the main reasons why there was a very healthy demand and oversubscription for the offer,” said Jose Luis Gomez, president and CEO of RCBC Capital Corp.

Virgillo Chua, SB Capital president and CEO, said the pricing mirrors an attractive risk-reward opportunity associated with the issuance. “The rates fetched during the offer period were also at the low end of the spectrum indicating strong demand alongside the risk premium assigned to the company,” Chua said.

Local debt watcher Philippine Ratings Service Corp. gave the bonds a PRS AA rating, indicating an issuer’s “strong capacity to meet its financial commitments relative to that of other Philippine corporates.”

At present, Megawide is undertaking the construction of the Malolos-Clark Railway Project Package 1, the modernization of Cebu’s historic Carbon Market District, and the CP-104 of the Metro Manila Subway.