Campos-led fruit canner Del Monte Philippines Inc. on Wednesday said it raised some P6.47 billion from its maiden offering of fixed-rate bonds.
The company said it will list the bonds at the Philippine Dealing and Exchange Corp. on October 30.
“The success of the bond offering reflects the investing public’s confidence and optimism in DMPI’s strong fundamentals and long-term prospects as well as the company’s financial strength and capability to meet our financial obligations,” Joselito Campos Jr., the company’s president and CEO, said.
The issuance consists of three-year bonds with an interest rate of 3.484 percent and five-year bonds with an interest rate of 3.7563 percent. It was slightly oversubscribed at 1.29 times.
With local benchmark interest rates approaching historic lows and the current system liquidity nearly reaching twice the level last year, the company said it saw an opportunity to lower borrowing costs while lengthening debt maturity profile.
The company said the offer was well-received by a good mix of retail and institutional investors that include insurance companies, retirement funds and asset management groups, among others.
While various businesses have been affected by the coronavirus outbreak and the prevailing community quarantine, Filipino families continue to spend a significant amount of their income on food.
A local ratings firm said that opportunities remain for food and beverage companies like Del Monte as their product offerings are classified as basic and essential goods.
Proceeds from this issuance will be used to refinance and term out existing short-term loans and convert them into long-term liabilities.
BDO Capital and Investment Corp., China Bank Capital Corp., First Metro Investment Corp. and RCBC Capital Corp. were picked as joint issue managers, joint lead underwriters and joint bookrunners for the maiden bond issuance.
Exchange Equity Partners acted as financial advisor to Del Monte.
The local unit of Del Monte Pacific Ltd., which owns the brand in the country, the United States and several parts of the Asia Pacific, has been operational in the Philippines for 94 years. It is the market leader in canned pineapple and mixed fruit, canned and tetra ready-to-drink juices, tomato sauce and spaghetti sauce categories, under its iconic Del Monte brand.
It operates an integrated 26,000-hectare pineapple plantation in Bukidnon, one of the largest in the world.
The company generated sales of P7.4 billion in its fiscal first quarter ending July with domestic sales comprising about two-thirds and the balance from the international market.