Upscale property developer Rockwell Land Corp. is seeking its bondholders’ consent to amend the covenant governing its P5-billion fixed rate bonds due February 2021 to align the terms with the Lopez-led company’s other existing debt facilities.
Rockwell announced last week the consent solicitation exercise for its seven-year and one-quarter bonds starting June 2 through June 24 this year. The goal is to amend the bond trust indenture to remove the debt service coverage ratio (DSCR) covenant.
Bondholders who will accept the proposed amendment will have the option to either receive an incentive fee or sell their bonds to Rockwell, the company said in a statement.
“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 said.
“Rockwell maintains its financial capability to service all of its outstanding obligations,” it added.
Provided that the conditions set by Rockwell are met, bondholders who consent to the amendment will be paid an incentive fee of P1.25 for each P1,000 of the principal amount of the bonds held.
Alternatively, bondholders who consent and opt to sell their bonds to Rockwell will receive the sum of the following:
– the outstanding principal amount of the bonds being sold multiplied by the tender price of 101 percent
– accrued interest computed from the last interest payment date up to the bonds sale proceeds payment date, which is no later than Aug. 17, 2020.
Consenting bondholders who will choose to receive the bonds sale proceeds will receive an additional notice for the execution of the sale of the bonds to Rockwell after the conclusion of the consent solicitation.
Rockwell has appointed First Metro Investment Corp. as adviser for this consent solicitation exercise.
Consent forms may be filled up electronically or delivered physically to First Metro Investment Corp. or Metropolitan Bank and Trust Co. Trust Banking Group.
Given the two and a half month lockdown and considering new safety protocols in construction, Rockwell expects to reduce capital spending this year by half from P18 billion to about P9 billion. Last year, capital expenditure amounted to P11.1 billion.