LISTED property developer DoubleDragon Corp. (DD) has set the interest rate for its forthcoming 3.5-year retail bond offering at 8.008% per annum.
“I personally believe that 2024 could be the very last year in my entrepreneurial journey that the retail public can participate with a retail bond priced at 8.008% coupon rate given that not only that DD is nearing the blue chip level of balance sheet but also the global high interest cycle is starting to shift to downward interest rate cycle,” DD Chairman Edgar “Injap” J. Sia II said in a statement on Monday.
This retail bond offering represents the initial segment of DD’s shelf-registered debt securities program, which totals up to P10 billion. The offering includes a principal amount of up to P3 billion, with an oversubscription option of up to P3 billion.
DD said the offer period commenced on June 28 and will run until July 10, with listing on the Philippine Dealing & Exchange Corp. scheduled for July 16.
According to its final prospectus dated June 27, the company anticipates generating over P5 billion in net proceeds assuming full exercise of the oversubscription option.
These proceeds are intended to partially finance the redemption of DD’s P9.7-billion fixed-rate bonds issued in July 2017, as well as to cover overhead expenses including working capital requirements.
The 3.5-year retail bond offering has received a “PRS Aaa” rating with a stable outlook from the Philippine Rating Services Corp. (PhilRatings). This rating denotes minimal credit risk, and the stable outlook indicates an expectation of the rating remaining unchanged over the next twelve months.
DD has engaged RCBC Capital Corp., Unicapital, Inc., and Development Bank of the Philippines as joint lead underwriters and bookrunners for the issuance.
“We are glad to tap the peso retail bond market again after over five years. We believe that the pricing of this DD retail bond offering at 8.008% will enable a wide range of people to avail of the good coupon rate for a Triple A-rated retail bond and given the minimum investment size of only P50,000,” Mr. Sia said.
“On top of that, 8 is also believed by many to be an auspicious or ‘swerte’ (lucky) number and having two 8s in the coupon rate could be even more auspicious,” he added.
For 2024, DD anticipates surpassing P100 billion in total equity for the first time.
The company also expects a strengthened balance sheet following the upcoming listing of its hotel subsidiary, Hotel101 Global Pte. Ltd., on the Nasdaq Stock Exchange in the United States.
Hotel101 Global will trade on Nasdaq under the ticker symbol “HBNB” following its execution of a binding definitive merger agreement with special purpose acquisition company JVSPAC Acquisition Corp.
Last year, DD saw a 23.25% increase in its consolidated net income to P15.93 billion as consolidated revenue climbed by 75% to P24.74 billion.
DD shares declined by 1.65% or 20 centavos, closing at P11.90 per share on Monday. — Revin Mikhael D. Ochave