ABS-CBN Corp. made a highly successful debut in the domestic retail bond market, raising a total of P6 billion with a tenor of seven years at 5.335 percent per annum.
“The success of this bond issue is a major achievement for our company, and is a culmination of management’s adoption and efficient execution of key business strategies over the last few years,” said Aldrin Cerrado, chief financial officer of ABS-CBN.
The Securities and Exchange Commission (SEC) earlier authorized the company to issue up to P10-billion fixed rate bonds in one or two tranches.
For the first tranche, the company decided to issue P5 billion, with an overallotment option to provide some flexibility in the event of an oversubscribed issue. Because of strong demand from retail and institutional investors, the underwriters exercised an overallotment option of P1 billion.
The company and the underwriters priced the issue at 110 basis points over the benchmark rate.
“I am particularly pleased that we were able to price the issue at the lowest end of the indicative pricing range, and achieve broad distribution to retail investors,” Cerrado said.
BDO Capital and Investment Corp., BPI Capital Corp. and HSBC acted as joint lead managers for the transaction. The company was earlier given the highest possible rating of “PRS Aaa” from Philippine Ratings Corp. (PhilRatings).
“I am happy to have started the year with a significant milestone for
ABS-CBN, and I hope this bodes well for what we plan to accomplish in the coming years‚” added Cerrado. Proceeds from the bond will be used to finance its capital expenditure program over the next few years.
ABS-CBN intends to invest in forward planning for its production process, which includes the construction of sound stages.
The planned sound stages will deliver improvements to operations by increasing production quality and reducing costs associated with on-location shoots.
Currently, the majority of ABS-CBN’s filming is done on-location. The company will also use part of the proceeds for the roll out of digital terrestrial TV and the expansion of its pay-TV business through Sky Cable.