LISTED real estate developer Double Dragon Properties Corporation said on Wednesday it has filed a preliminary prospectus to the Securities and Exchange Commission (SEC) covering the issuance of the second tranche of its Fixed Rate Retail Bonds with a base size of P6.5 billion, with an oversubscription of P3.2 billion.
The proposed issuance forms part of the P15-billion Fixed Rate Retail Bonds that were previously approved by the SEC, and were filed under a shelf registration program. The SEC approved the first tranche last December amounting to P5.3 billion.
“This offering will be a good chance for retail bond investors to participate in a fresh name like DoubleDragon since we do not expect to be tapping the bond market again anytime soon beyond what is remaining on our shelf registration from last December,” DoubleDragon Chief Investment Officer Hannah Yulo said.
“Once completely taken up, the proceeds are expected to fully cover our development plans through 2020 for both our office and retail portfolios,” she added.
Credit rating agency Philippine Rating Services Corporation (PhilRatings) maintained an issue credit rating of PRS Aa for the second tranche bond issuance.
Obligations rated PRS Aa are of high quality and are subject to very low credit risk. Hence, the obligor’s capacity to meet its financial commitment is extremely strong.
Likewise, PhilRatings maintained a Rating Outlook of Positive for DoubleDragon’s credit rating for this proposed debt issue.
PhilRatings assigns a Rating Outlook of Positive to issuances that it defines to hold a potential for its present credit rating to be upgraded in the next 12 months. PRS Aa is the second highest rating category in PhilRatings’ existing credit rating scale.
Bulk of the proceeds of the bond issuance will be used to finance capital expenditures of DoubleDragon’s core recurring revenue focused projects: CityMalls; DD Meridian Park; and Jollibee Tower, according to the company.
The remaining P9.7 billion in fixed rate retail bonds under shelf registration previously approved by the SEC is intended to fully fund the remaining capital expenditure requirements for the completion of the planned 1 million square meters of leasable space DoubleDragon anticipates to have in its portfolio by 2020.
“In the next three months, we are set to open 10 more CityMalls across the country and we expect to have at least 30 operational CityMalls by the end of the year making CityMall the dominant community mall player in the Philippines,” DoubleDragon Chairman and Chief Executive Officer Edgar Sia 2nd said.
“On top of that, the first phase of our flagship Metro Manila commercial and office project, DoubleDragon Plaza at DD Meridian Park [in Pasay City], is set to be completed ahead of schedule within the last quarter of this year,” he added.
To date, 53,800 sqm of leasable space within the four towers of DoubleDragon Plaza has already been taken up.