D&L Industries, Inc. said its bond offering received “strong support” from fixed-income investors as total bids amounted to P13.8 billion so far, 4.6 times its base offer of P3 billion.
The maiden bond offer has an oversubscription option of up to P2 billion.
“We are overwhelmed with the strong support the fixed income community has shown us in our debut bond issuance. This has allowed us to price our bonds at among the lowest rates in Philippine corporate bond history,” D&L President and Chief Executive Officer Alvin D. Lao said in a statement on Friday.
D&L’s bond offer comprises P2-billion three-year Series A bonds at a 2.7885% per annum (p.a.) rate due 2024, with an oversubscription option of up to P1 billion.
Meanwhile, its five-year Series B bonds with 3.5962% p.a. due 2026 have a base offer of P1 billion and a P1 billion oversubscription option.
The bonds have been rated by the Philippine Rating Services Corp. with PRS Aaa with a “stable outlook,” which means the credit rating agency sees the company has a “very strong capacity” to meet financial obligations and expects the rating to be maintained within the next twelve months.
“This maiden offering will be a useful financial exercise for the company and will allow us to fully fund our Batangas expansion, which will be the next leg of growth for the company,” said Mr. Lao.
The company will be using proceeds from the bond issuance to fund its Batangas plant expansion as well as to cater to its working capital requirements. Total capital expenditures for the project amount to P8 billion, and the company said it had P3.5 billion left.
D&L said the plant will be used for its export business, particularly food and the oleochemicals segment. The company is planning to develop more coconut-based products and is keen on entering new markets abroad.
“We are looking forward to May 2022 when commercial operations finally start,” Mr. Lao said.
On Friday, D&L shares at the stock exchange declined by 0.24% or two centavos to close at P8.28 each. — Keren Concepcion G. Valmonte