Globe Telecom Inc. has tapped the international debt market to raise $600 million to refinance maturing debts and fund capital expenditures.
The Ayala-led telco said the $300 million 10-year and $300 million 15-year REG S only dual tranche unrated US dollar-denominated senior notes had a coupon rate of 2.500 percent and 3.000 percent, respectively.
Globe returned to the international debt capital markets after 16 years allowing the company to take advantage of the favorable interest rate environment and diversify its lender base.
The company said the net proceeds from the issue of the notes will be used to finance its capex, refinance maturing and/or existing obligations, and for general corporate requirements.
The final order book was oversubscribed by 6.5 times, allowing Globe to tighten from the initial pricing guidance by 40 basis points for the 10-year tranche and 35 basis points for the 15-year tranche.
The 10-year tranche represents the lowest ever yield for an unrated 10-year US dollar issuance globally and the tightest spread ever for any unrated corporate US dollar issuance in Southeast Asia.
On the other hand, the 15-year tranche represents the longest ever tenor for an unrated corporate US dollar issuance globally, according to Dealogic.
“The issuance is a testament of the investor community’s unwavering trust in the Company’s strong business fundamentals. The success of the offering, after having last tapped the international capital markets in 2004 and achieving a record-low coupon for the 10-year tranche and the record-long tenor for unrated bonds for the 15-year tranche, enables us to maintain our momentum, enhance our network and deliver on our commitment of providing first-world internet connectivity to the Philippines,” Ernest Cu, Globe president and chief executive said.
Rizza Maniego-Eala, Globe chief finance officer said the company’s the outstanding success of the transaction underscores global investors’ confidence in Globe’s strong long-term outlook.
“This issuance was an important milestone in our continuous engagement with investors and expanding our debt capital structure,” sheadded.
HSBC and J.P. Morgan acted as Joint Global Coordinators, and HSBC, J.P. Morgan, and BPI Capital Corporation acted as Joint Lead Managers and Joint Bookrunners.