Rockwell Land CorporationRockwell Land Corporation will conduct a consent solicitation exercise for its seven-year and one-quarter P5.0 billion fixed rate bonds due on February 15, 2021.
The consent solicitation seeks to amend the bond trust indenture to remove the debt service coverage ratio (DSCR) covenant under the bonds. The proposed amendment will align the financial covenants of the bonds with Rockwell’s other existing debt facilities that do not have a DSCR covenant.
Rockwell maintains its financial capability to service all of its outstanding obligations.
Provided that the conditions set by Rockwell are met, bondholders who provide their consents shall be paid an incentive fee of P1.25 for each P1,000 of the principal amount of the bonds. Alternatively, bondholders who provide their consents and opt to sell their bonds to Rockwell shall receive the sum of the outstanding principal amount of the bonds being sold multiplied by the tender price of 101%, and accrued interest computed from the last interest payment date up to the bonds sale proceeds payment date, which is no later than August 17, 2020.
Consenting bondholders that elect to receive the bonds sale proceeds shall receive an additional notice for the execution of the sale of the bonds to Rockwell after the conclusion of the consent solicitation.
The exercise started on June 2, 2020 and will expire on June 24, 2020. Rockwell appointed First Metro Investment Corporation as advisor for this consent solicitation exercise.
Rockwell recorded a consolidated net income after tax of P3.0 billion in 2019, 20% higher than previous year. Reservation sales in 2019 grew by 13% to P16.7 billion. On the first quarter of 2020, reservation sales were recorded at P3.2 billion, 9% lower than previous year. Given the 2.5-month lockdown and considering new safety protocols in construction, the company also expects to reduce capex in 2020 by half from P18 billion to around P9 billion. Capex in 2019 was at P11.1 billion.