PLDT, Inc. is seeking to amend the terms of its seven-year and ten-year fixed-rate bonds to help it gain flexibility in raising its budget for capital spending.
The telecommunications firm told the stock exchange Friday it is asking bondholders to agree to the amendment of the maximum stand-alone total debt to EBITDA (earnings before interest, taxes, depreciation and amortization) ratio in its trust indenture for the bonds to 4.0:1 from 3.0:1.
The consent solicitation exercise is for the company’s 5.2250% seven-year fixed-rate bonds due Feb. 6, 2021 and 5.2813% 10-year fixed-rate bonds due Feb. 6, 2024.
“The Proposed Amendment seeks to provide the Issuer with greater flexibility to support, if necessary, higher levels of capital expenditures and general corporate requirements given the pipeline of network expansion programs that PLDT would like to undertake and in order to serve the increasing data requirements of its customers so as to strengthen PLDT’s market position,” the telco giant said.
PLDT allotted a record capital expenditure investment of P78.4 billion this year, 34% up from last year’s P58.5 billion.
“Moreover, it will align the covenant ratio of PLDT’s outstanding debt capital market issuances with that of the existing bilateral facilities of both PLDT and its wholly-owned subsidiary, Smart Communications, Inc.,” it added.
In a consent solicitation statement on its website, PLDT said the activity does not intend to change the interest rate, maturity dates and its obligation to make principal and interest payments on the bonds.
The consent solicitation exercise will begin on Oct. 16 and will last until Nov. 15.
The company said it will pay bondholders that are registered as of Oct. 8 P1 per P1,000 of the principal amount of the bonds if they are able to give a properly and validly executed consent form agreeing to the proposed amendment.
PLDT appointed BDO Capital & Investment Corp., BPI Capital Corp. and First Metro Investment Corp. as advisors for the consent solicitation exercise.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez