Globe Telecom, Inc. raised $600 million from the sale of dual-tranche fixed-rate notes, after a 16-year absence from the global bond market.
The listed telecommunications firm took advantage of the favorable interest rate environment to offer 10-year and 15-year senior dollar notes with a coupon rate of 2.5% and 3%, respectively, which fetched $300 million each.
The amount is similar to what rival PLDT, Inc. yielded from its global dual-series bond float last month.
Globe told the stock exchange Friday it will use proceeds to its capital expenditures, among others. For this year, the company allotted P63 billion for capital spending, particularly on infrastructure development.
“The success of the offering…enables us to maintain our momentum, enhance our network and deliver on our commitment of providing first-world internet connectivity to the Philippines,” Globe President and Chief Executive Officer Ernest L. Cu said.
The company said the unrated notes were oversubscribed by 6.5 times, allowing them to tighten the bond spread by 40 basis points for the 10-year series and 35 basis points for the 15-year tranche.
It claimed the yield of its 10-year bonds was the “lowest” globally for similar unrated dollar tenors. The notes have the “tightest spread” among unrated dollar bonds in Southeast Asia.
On the other hand, Globe said the 15-year bond tranche is touted the “longest” tenor for an unrated corporate dollar bond issued worldwide, citing financial market platform Dealogic.
Noting the deal execution as “one of the fastest unrated bond deals for corporate,” Rizza Maniego-Eala, Globe’s chief finance officer, said the “outstanding success of the transaction underscores global investors’ confidence in Globe’s strong long-term outlook.”
In May, Fitch gave Globe a credit rating of BBB-, which means it has an “adequate” capacity to settle its financial commitments, as well as a “stable” outlook.
HSBC and J.P. Morgan were tapped as Joint Global Coordinators for the bonds sale, as well as the Joint Lead Managers and Joint Bookrunners, along with BPI Capital Corporation.
Globe is still applying to list the dual-series notes on the Singapore Exchange Securities Trading Limited.
Shares in Globe inched up 0.58% on Friday to close at P2,078 each. — Adam J. Ang
