THE Philippine Long Distance Telephone Co. (PLDT) on Thursday issued its maiden peso retail bonds, and exercised its oversubscription option to increase the total issue size from P10 billion to P15 billion.
“Today marks another milestone for PLDT, as we finally issue and likewise list, our maiden P15-billion SEC-registered bonds. In the past, PLDT tapped bilateral loans and private placements for our financing requirements. This time, we saw a unique opportunity to reach out to the retail investors as partners in our fundraising exercise,” said Napoleon Nazareno, president and chief executive officer of PLDT, in his speech during the ceremony for the bond issue. SEC is the Securities and Exchange Commission.
He added that, “Certainly, our experience demonstrates to us that the local capital markets have indeed developed to become an interesting funding source for large corporate issuers like ourselves.”
The company said that the bonds, which have tenors of seven and 10 years, were more than twice oversubscribed. The strong support enabled PLDT to price its bonds at the tightest end of its pricing guidance, with the seven- and 10-year bonds priced at 5.2250 percent and 5.2813 percent, respectively, equivalent to 100 basis points over the relevant government benchmarks.
Of the P15-billion issue size, a total of P12.4 billion was allocated to the seven-year tranche, and the remaining P2.6 billion to the 10-year tranche.
“We are grateful for the support, trust and confidence that investors have shown in our maiden bond offering, which will partially finance our capital expenditures this year. With this issuance, PLDT is better positioned to further improve our network and services to our growing customer base,” Napoleon said.
PLDT’s inaugural bonds were rated by Credit Rating and Investors Services Philippines Inc. as “AAA” with a “stable” outlook, the highest on the scale. PLDT is rated investment grade by three international rating agencies, namely Moody’s Investors Service, Standard and Poor’s and Fitch Ratings.
Moody’s earlier said that PLDT’s local retail bond issue is credit positive as “it will help PLDT to term out its debt maturity profile and reduce foreign exchange rate risk.”
The bonds were listed at the Philippine Dealing and Exchange Corp. on Thursday. The listing aims to better facilitate secondary market trading for existing and potential PLDT bond investors.
First Metro Investment Corp. acted as issue coordinator for the bonds, and is also a joint lead underwriter and joint bookrunner alongside BDO Capital and Investment Corp. BPI Capital Corp. and The Hong Kong and Shanghai Banking Corp. Ltd.
Also joining the joint lead underwriters in distributing the bonds are China Banking Corp., Development Bank of the Philippines, RCBC Capital Corp. and SB Capital Corp. who acted as co-lead underwriters, including Land Bank of the Philippines who was a participating underwriter in PLDT’s inaugural bonds.