DoubleDragon set for P10-B bond offering with top credit rating

DoubleDragon Corporation's upcoming bond issuance, which may reach up to P10 billion, has been awarded a top credit rating of PRS Aaa by Philippine Rating Services Corporation (PhilRatings), with a stable outlook.

The company is set to issue P5 billion in bonds, with an option to oversubscribe for an additional P5 billion. This marks the initial tranche of a broader three-year retail bonds program aimed at raising P30 billion.

This bond issuance is aimed at enhancing DoubleDragon’s financial standing by bolstering its cash reserves. Bonds rated PRS Aaa are recognized for their exceptional quality and minimal credit risk, indicating that the issuer is highly capable of meeting its financial obligations. The stable outlook suggests that the rating is likely to remain unchanged over the next year.

PhilRatings attributes the high rating and stable outlook to DoubleDragon's well-articulated growth strategy, experienced leadership, and strong partnerships with reputable industry players. The company’s prudent financial management is also noted, particularly given the capital-intensive nature of its operations and expectations of improved cash flow due to rising rental income.

DoubleDragon anticipates significant revenue generation from its portfolio of 1.3 million square meters of completed projects, which are expected to mature by 2025, resulting in enhanced operating cash flow during this period.

The funds raised through this bond issuance are intended to fortify the company’s financial position and maintain sufficient cash levels to meet future operational and financing requirements.

Scheduled for November 2024, DoubleDragon’s bond offering will feature a 5.5-year tenor and an anticipated interest rate of 8%, with a minimum investment amount of P50,000.

This move follows the company's successful re-entry into the peso retail bond market, where it raised a total of P10 billion in the third quarter of 2024.

DoubleDragon Chairman Edgar Injap Sia II remarked that with the current trend of low interest rates, this bond offering may represent one of the final opportunities to secure an 8% rate for some time. He added that this initiative also aims to accommodate retail investors who were unable to participate in previous bond offerings.