The Philippines’ second-largest mobile operator, Globe Telecom, is preparing to offer an initial tranche of PhP10bn (US$234.5m) in fixed-rate bonds as part of its PhP15bn (US$352m) retail bond programme.
Ratings agency PhilRatings has assigned its…
The Philippines’ second-largest mobile operator, Globe Telecom, is preparing to offer an initial tranche of PhP10bn (US$234.5m) in fixed-rate bonds as part of its PhP15bn (US$352m) retail bond programme.
Ratings agency PhilRatings has assigned its highest ‘PRS Aaa’ rating to the proposed issuance, which has a principle amount of up to PhP15bn, Globe CFO Alberto De Larrazabal said in a notice to the Philippine Stock Exchange (PSE).
The company said the net proceeds will be used to help fund its network modernisation and IT transformation programme, which will require investments of US$790m over the next five years. Larrazabal said the company plans to spend US$640m this year and next.
In a statement announcing its rating of the issuance, PhilRatings said Globe may issue an additional tranche of debt securities with a principle amount of PhP5bn (US$117.1m) depending “on market conditions and other factors”.
Globe confirmed its board had approved the PhP10bn retail bond programme in mid-February, explaining in a notice to the PSE that it would enable the company to tap the retail market in one or several tranches over the next 12 months.
Larrazabal was quoted telling reporters in a briefing that PhP10bn (US$234.3m) would be issued by the middle of this year, while the remaining PhP5bn (US$117.1m) would be issued in 2011.
PhilRatings noted in its statement that Globe settled its rated PhP5bn (US$117.1m) fixed-rate bonds, which consisted of PhP1.974bn three-year bonds due in 2012 and PhP3.026bn five-year bonds due in 2014, earlier this year using internally-generated funds and long-term loans.
