RLC beefs up war chest with 12x oversubscribed bond

MANILA, Philippines — Gokongwei-led Robinsons Land Corp. (RLC), one of the country’s leading real estate developers, has strengthened its war chest anew as it gears up for further growth and expansion along with the reopening of the economy.

RLC returned to the local debt market last week, successfully raising P15 billion in fixed-rate bonds listed at the Philippine Dealing and Exchange Corp.

Investors gobbled up the transaction as total bids reached P120 billion, 12 times the base offer, prompting the company to exercise its oversubscription option of up to P5 billion.

Proceeds from the first tranche will support business expansion and investment aimed at generating sustainable value for shareholders while a portion or and about a third of it would be used to repay debt and  maturing obligations, RLC president and CEO Frederick Go said.

“We are delighted with the overwhelming market reception and record oversubscription of our bond offering, which signify strong investor confidence in RLC’s brand of excellence and demonstrated resilience,” Go said.

“We’d like to think that this is attributed to the Robinsons Land brand. I guess the excellent management of the company and the trust and confidence in the Robinsons Land brand,” Go told The STAR in a phone interview.

Go said the majority of proceeds of the bonds would be used for the company’s capital expenditure program, specifically “the expansion of our malls, office buildings, hotels and industrial estate, he elaborated.

Strong demand from the fixed income community allowed RLC to price the bonds at the tightest of spreads. With quarterly interest payments, the bonds carry a coupon of 5.3789 percent per annum and 5.9362 percent per annum for the three-year and five-year tenor, respectively.

The bond issuance marks the first tranche of RLC’s P30-billion, three-year debt securities program filed under shelf-registration with the Securities and Exchange Commission (SEC).

Local debt rating agency Philippine Rating Services Corp. (PhilRatings) has given RLC the highest issue credit rating of PRS Aaa for the bonds with a stable outlook.

The bond sale forms part of the company’s strategy to diversify funding sources. Proceeds will be used to partially fund its capital expenditure requirements for project development and land acquisition, to refinance maturing debt obligations, and support overall business operations.

RLC is ready to expand its extensive portfolio of properties, which at present, encompass different asset classes.

These include 53 lifestyle centers; 28 prime office developments anchored on the resilient BPO sector; five workable centers in the growing flexible workspace segment; 24 diverse, multi-branded hotel properties consisting of upscale deluxe hotels, mid-market boutique city and resort hotels, essential service value hotels, and luxury resorts; seven industrial facilities capitalizing on abundant opportunities in the logistics sector; over 100 residential properties; and 20 mixed-use developments, including three landmark destination estates that espouse the live-work-play-inspire lifestyle.

The company engaged BDO Capital, BPI Capital Corp., China Bank Capital, First Metro Investment Corp. and SB Capital as the joint issue managers, joint lead underwriters and joint bookrunners for the transaction.

Selling agents of the transactions are East West Banking Corp., PNB Capital and Investment Corp., RCBC Capital Corp. and Robinsons Bank Corp.

RLC reported a net income of P5.36 billion in the first half, surpassing pre-pandemic numbers by 34 percent.

Go expressed optimism for the continued positive performance of the company in the second half. “We’re very hopeful for the second half of the year. We think a lot of our businesses are recovering, such as our mall business. It’s probably close to pre-pandemic levels,” he said.