DoubleDragon Properties Corp. said Friday it raised P5.3 billion from the sale of 10-year fixed-rate bonds.
DoubleDragon said in a disclosure to the stock exchange it exercised an option to raise an additional P300 million amid oversubscription.
The property developer earlier planned a base offering of P5 billion with an option to increase the size by another P5 billion in case of strong demand.
BPI Capital Corp. managing director Eric Luchangco said in an interview DoubleDragon’s offering was affected by year-end closing of books by investors.
“We realized when we were doing the transaction that demand may be affected by yearend factor since many people are closing their books ahead of holiday activities,” Luchangco said.
The company decided to push through with the offering even at a smaller size rather than move the offering next year wherein rates would likely be higher.
“The objective of this bond offering is to lock in funding at lower cost because we know that rates next year will be on an upward bias,” Luchangco said.
BPI Capital was one of the underwriters for the offering.
Some analysts, however, expressed concern that DoubleDragon took more debt which could affect its profits.
Share price of DoubleDragon has been on a downward trend. From a 52-week high of P80 per share, price dropped to P38.50 Thursday.
Luchangco said while DoubleDragon would carry more debt after the bond offering, the company was able to secure funding for expansion projects at a lower interest rate.
He said the company’s fundamentals would continue to support business plans.