DoubleDragon Launches ₱30 Billion Retail Bond Program for 2024-2026
On October 8, 2024, DoubleDragon Corporation’s Board of Directors approved a multi-year retail bond issuance plan, aiming to raise a total of P30 billion from 2024 through 2026. This program will be divided into multiple tranches, with the first tranche expected to roll out later this year.
Retail Bond Program
The retail bonds will have a maturity period of 5 to 7 years, offering attractive interest rates for investors. The 2024 bonds will carry an estimated interest rate of around 8% per year, while the rates for the 2025 and 2026 issuances are expected to be approximately 7% and 6%, respectively.
The first bond issuance, dubbed the "Dragon Year-End Bonds," will take place before the end of 2024 to coincide with the close of the Year of the Dragon. DoubleDragon’s strategic use of the number "8," considered an auspicious number in many cultures, has been prominent in its recent bonds, which saw significant demand from retail investors earlier this year.
DoubleDragon had successfully issued P10 billion worth of bonds in the third quarter of 2024. That offering was oversubscribed, highlighting strong investor confidence in the company’s financial stability and future prospects.
Boosting Financial Resilience
The planned bond program is part of DoubleDragon’s broader effort to strengthen its balance sheet and increase its cash reserves. Since its listing on the Philippine Stock Exchange in 2014, DoubleDragon has been aggressive in raising capital to build its recurring revenue-generating assets. The company now boasts 1.3 million square meters of completed gross floor area (GFA), spread across key locations in Luzon, Visayas, Mindanao, and even overseas.
DoubleDragon’s revenue-generating properties are expected to start yielding full returns by 2025, reducing the company’s need for substantial capital expenditures moving forward. As a result, the retail bond offerings are aimed at positioning the company as a mature, Tier-1 player by the next year.
Key Figures and Future Outlook
DoubleDragon is on track to exceed P100 billion in total equity for the first time in 2024, a milestone that puts it among a select group of companies in the Philippines with such financial strength. In addition, the company’s net debt-to-equity ratio remains at a healthy 0.69x as of June 2024, indicating a stable financial structure.
Apart from its hard asset portfolio, DoubleDragon has also ventured into an innovative, asset-light business model through its Hotel101 Global brand. This concept, described as highly portable and scalable, is set to be expanded globally, with a potential listing in the U.S. market that is expected to bolster the company’s cash inflows and further support the Philippine economy with U.S. dollar inflows.
Final Bond Issuances for 2024
The initial P5 billion offering set for Q4 2024 is anticipated to be one of the last major long-term bond offerings available in the Philippines this year. With an attractive interest rate of 8%, this could present one of the final opportunities for investors to secure a solid return from a highly rated and diversified company like DoubleDragon.
As the company shifts its focus from capital-heavy asset building to optimizing its existing portfolio, the bond issuances are poised to provide the necessary liquidity and flexibility to meet its financial goals and pursue new opportunities.