Megaworld concludes $100-M bond issue, the 1st since ’97 crisis

Upscale real estate developer Megaworld Corp. has concluded a $100-million five-year bond issue, marking the first international bond float by a Philippine property company since the 1997 Asian financial crisis.

In a statement issued yesterday, Megaworld said the dollar denominated bond maturing on August 2011 carries a coupon of 7.875 percent and was priced at 98.488 percent or an equivalent of 327 basis points over benchmark US treasuries due 2011.

The bond issue is Megaworld’s second international issue this year, following an international equity offering raising $122 million last April.

Megaworld said net proceeds from the bond issue will be used to fasttrack the 25-hectare Newport City project near the Villamor golf course in Pasay City.

The project involves the development of a hotel, retail and entertainment complex, and the construction of buildings catering to the needs of companies in the business process outsourcing (BPO) and logistics industries. It is slated for completion by 2008.

Newport City, a joint venture between Megaworld and the Bases Conversion Development Authority, is expected to generate P150 million in recurring income a year from an airport hotel and retail and commercial operations. Marketing of the project’s residential section is slated to kick off by the third quarter of the year.

Megaworld, a leading property developer in the Philippines, focuses on the middle to high-end residential and office markets. Its flagship development is Eastwood City, a 15-hectare cyberpark and mixed-use project.

Aside from Eastwood, Megaworld’s current portfolio includes 56 hectares in Fort Bonifacio, 25 hectares in Newport City, 5.7 hectares in Araneta Center and 4.6 hectares in Binondo.

Megaworld is currently building two call center buildings. Once completed, these structures would raise the company’s BPO leasable space to 105,000 square meters.

The company’s other big-ticket township or residential projects include the 50-hectare McKinley Hill in Bonifacio Global City, Manhattan Garden City in Araneta Center, Cubao, and the P15-billion Forbes Town Center, a joint development with the Bonifacio West Development Corp.