RLC bolsters its war chest with a 12x oversubscribed bond
August 29, 2022 | 00:00
MANILA, Philippines – Robinsons Land Corp. (RLC), led by Gokongwei, one of the country’s leading property developers, has further bolstered its war chest as it prepares for continued growth and expansion as the economy reopens.
RLC returned to the local debt market last week, successfully raising 15 billion pesos of fixed rate bonds listed on the Philippine Dealing and Exchange Corp.
Investors gobbled up the deal as total bids reached 120 billion pesos, 12 times the base bid, prompting the company to exercise its oversubscription option up to 5 billion pesos.
Proceeds from the first tranche will support business expansion and investments aimed at generating sustainable shareholder value, while a portion or approximately one-third of it would be used to repay debt and obligations coming to maturity, said RLC President and CEO Frederick Go.
“We are delighted with the overwhelming market reception and record oversubscription of our bond offering, which signifies strong investor confidence in RLC’s brand of excellence and demonstrated resilience,” Go said.
“We would like to think this is attributed to the Robinsons Land brand. I guess the great management of the business and the trust in the Robinsons Land brand,” Go told The STAR in a phone interview.
Go said the majority of the proceeds from the bonds would be used for the company’s capital expenditure program, specifically “the expansion of our shopping malls, office buildings, hotels and industrial areas,” he explained. .
Strong demand from the fixed income community has allowed RLC to price bonds at the tightest spreads. With quarterly interest payments, the bonds carry a coupon of 5.3789% per annum and 5.9362% per annum for the terms of three and five years, respectively.
The bond issue marks the first tranche of RLC’s three-year, 30 billion peso debt securities program filed for pre-registration with the Securities and Exchange Commission (SEC).
Local debt rating agency Philippine Rating Services Corp. (PhilRatings) has assigned RLC the highest issue credit rating of PRS Aaa for bonds with a stable outlook.
The sale of bonds is part of the company’s strategy to diversify funding sources. The proceeds will be used to partially fund its capital expenditure requirements for project development and land acquisition, to refinance maturing debts and to support overall business operations.
RLC is ready to expand its extensive portfolio of properties, which currently encompass different asset classes.
These include 53 lifestyle centers; 28 prime office developments rooted in the resilient BPO sector; five functional centers in the growing segment of flexible workspaces; 24 diverse, multi-brand hotel properties comprised of high-end luxury hotels, mid-sized city and resort hotels, hotels with essential services and luxury resorts; seven industrial sites capitalizing on numerous opportunities in the logistics sector; more than 100 residential properties; and 20 mixed-use developments, including three iconic destination areas that embrace the lifestyle inspired by live, work and play.
The company hired BDO Capital, BPI Capital Corp., China Bank Capital, First Metro Investment Corp. and SB Capital as co-issue managers, co-lead managers and co-bookrunners for the transaction.
The sales agents for the transactions are East West Banking Corp., PNB Capital and Investment Corp., RCBC Capital Corp. and Robinsons Bank Corp.
RLC reported net income of 5.36 billion pesos in the first half, beating pre-pandemic figures by 34%.
Go expressed optimism that the company’s positive performance will continue in the second half. “We have a lot of hope for the second half of the year. We believe that many of our businesses are recovering, such as our mall operations. It’s probably close to pre-pandemic levels,” he said.