AFTER almost two decades, PLDT Inc. has returned to the international bond market, after successfully setting the terms of a $600-million dual-tranche offering, proceeds of which will be used to refinance existing debt and partially fund its capital expenses.
Manuel V. Pangilinan, the company’s president, announced that the dollar-denominated long 10-year and 30-year have fetched a coupon price of 2.5 percent and 3.45 percent, respectively. These are payable semiannually.
The bonds were priced at T+180 and T+195 with a re-offer yield of 2.566 percent and 3.495 percent.
“We are mindful that our performance in the coming years should match the expectations of the market that received us so warmly,” said Pangilinan. The company first entered the international bond market in 2001. It also markets the lowest ever coupon for a 10-year and 30-year issuance by a Philippine corporate, as well as the first 30-year offering for a non-government entity out of the Philippines.
The turnout was also a record for a Filipino company, as it was oversubscribed by 17x.
PLDT’s successful bond sale may have been driven by “strong liquidity and yield pickup,” National Treasurer Rosalia de Leon said in a mobile-phone reply to query. She said the government “will see” if there’s an opportunity for the sovereign issuer to return to the dollar bond market this year.
“While the proceeds will go mainly to refinancing our existing debt at lower interest rates, a portion will also be used to fund capital expenditures so that we can continue investing in network leadership and drive revenue growth,” PLDT CFO Annabelle L. Chua said.
The company revised its capital expenditures (capex) forecast for 2020, with executives saying that it may spend 25 percent less than the original outlay. Pangilinan said capex for the year may settle at around P63 billion, a P20-billion reduction from the programmed P83-billion capital for 2020.
This decision came as the company’s sources of materials for its infrastructure build have limited shipments. This is exacerbated by the fact that lockdowns on different levels have been imposed in various areas in the Philippines. With Bloomberg News
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