Megaworld raises P5 billion from bond offering

MANILA, Philippines - Megaworld Corp., the upscale real estate development arm of tycoon Andrew Tan, successfully raised P5 billion from a recent bond offering which was 2.4 times oversubscribed.

The bonds, which will be listed at the Philippine Dealing Exchange, were issued to institutional and retail investors through a general public offering handled by BDO Capital & Investment Corp. and The Hong Kong and Shanghai Banking Corp. Ltd.

Priced at 8.46 percent per annum, the bonds carry a term of five years and six months.

The bond issue was assigned the highest rating of AAA by Credit Rating and Investors’ Services Philippines Inc., reflecting the borrower’s strongest capacity to repay debt obligations.

Proceeds from the issue will be used to partly fund Megaworld’s capital expenditures over three years beginning 2009 for the development of the North Bonifacio Central District project. Megaworld has committed to invest at least P15.6 billion over 20 years to develop the 8.38-hectare property into a mixed-use complex.

Megaworld has expressed confidence on the long-term development potential of the property and remains firmly committed to Bonifacio Global City as the upcoming premier central business district in the country.

The company’s proposal for the North Bonifacio lots is a mixed-use development of more than 500,000 square meters of gross floor area and is predominantly residential.

With a cash position of P15.7 billion as of end-June this year, Megaworld boasts of a strong capability to carry out large-scale property development projects. It has a successful track record of building self-contained communities under its pioneering live-work-play-learn concept.

In the first half this year, Megaworld reported a 12-percent growth in net income to P2 billion on the back of a 16-percent rise in revenues. Real estate sales accounted for P6.07 billion, 15 percent higher than the year earlier level of P5.28 billion.

Megaworld currently has five townships within Metro Manila, as well as stand-alone projects in the Makati central business district. It has about 275,000 square meters of BPO office space and expects to complete another 60,000 square meters by yearend.

The company is launching five new residential condominium projects this year estimated to generate around P12 billion in sales.