Megawide Lists ₱4-B Maiden Bond Offer

Megawide Construction Corp. has listed its maiden offering of PHP4.0 billion fixed rate bonds that includes the oversubscription option of P1 billion as investors, buoyed by the company's strategic reach in its infra projects, swamped the bond issue that gives a breather to the company for the forthcoming interest rate uptick of the Bangko Sentral ng Pilipinas.

Photo Insert: The Bonds were rated PRS AA by the Philippine Ratings Service Corporation dated 27 May 2022, indicating an Issuer’s “strong capacity to meet its financial commitments relative to that of other Philippine corporates.”

The bond offering had tenders of PHP6.71 billion and was 2.24x oversubscribed from the P3.0 billion base issue amount during the offer period, which ran from July 28, 2022, to August 05, 2022, resulting in the additional P1 billion oversubscription option.

Listed on the Philippine Dealing Exchange, the bond issuance consists of Series A (Php 1.6 billion maturing in 3.5 years from the issue date at a rate of 6.9506%) and Series B (Php 2.4 billion maturing in five (5) years from the issue date at a rate of 7.9663%).

“We are very thankful for the investors and our joint lead underwriters for again delivering a successful capital raising campaign. We also would like to thank our regulators, the PDS Group and the SEC, for paving the way for this momentous undertaking. 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,” Megawide Chairman and CEO Edgar Saavedra said.

RCBC Capital Corp. and SB Capital Investment Corp. were the Joint Issue Managers, Joint Lead Underwriters, and Bookrunners for the exercise, with RCBC - Trust and Investment Group acting as Trustee and Security Bank Corporation as Market Maker.

“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,” Jose Luis Gomez, President and CEO of RCBC Capital Corp, noted.

For his part, Virgillo Chua, SB Capital Investment Corp. 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 added.

The Bonds were rated PRS AA by the Philippine Ratings Service Corporation dated 27 May 2022, indicating an Issuer’s “strong capacity to meet its financial commitments relative to that of other Philippine corporates.”

“The completion of the offer was also very timely as we were able to issue ahead of another policy rate hike implementation by the Bangko Sentral ng Pilipinas, which could have affected the pricing. Aside from relieving some pressure off bank lines, especially under uncertain times, we are able to stretch our maturity towers as we replace short-term with longer-term tenors,” Ramon H. Diaz, Megawide Group Chief Financial Officer added.

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

Megawide was recently awarded the contract for CP-104 of the Metro Manila Subway System Project worth P18 billion, together with its Japanese consortium partners, and expressed interest in participating in other adjacent packages of the same project.

Furthermore, Megawide is currently in different stages of discussion with several parties for the expansion of its transit-centric developments (TCDs), anchored on the Parañaque Integrated Terminal Exchange (PITX), to strengthen its land-based transport-related infrastructure portfolio.

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