JG Summit raises $750M via overseas bond issue

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Gokongwei-led conglomerate JG Summit Holdings has returned to the overseas bond market with a landmark $750-million offshore bond issue, the largest overseas corporate bond deal out of the Philippines.

Through wholly owned JGSH Philippines Ltd., the conglomerate issued 10-year senior debt at an interest of 4.375 percent a year, the lowest yield ever for a 10-year US dollar-denominated bond from corporate Philippines.

This bond deal marked the JG Summit group’s first offshore foray in seven years.

The bond issue was upsized from original offer size of $500 million due to strong demand.

The order book reached an unprecedented $6.6 billion, said Wick Veloso, chief executive officer of HSBC Philippines, which is one of the bond arrangers.

“JG Summit is a credit that the market wants an exposure to and this is best shown by the overwhelming demand and tight pricing,” Veloso said in an interview.

HSBC, along with Citigroup Global Markets Ltd. and Credit Suisse Securities (Europe) Ltd., acted as joint bookrunners and joint lead managers for this issue.

The bond deal was completed following road shows held simultaneously in Hong Kong and Singapore on Tuesday.

Some 222 high-quality institutional investors participated in this bond deal, 91 percent of which came from Asia, 8 percent from Europe and 1 percent from US offshore accounts.

“We congratulate JG Summit on this highly successful landmark transaction. This represents the tightest pricing ever for a 10-year issue from a Philippine corporate and the lowest coupon achieved by JG Summit to date since their previous international bond offering in 2006,” Veloso said.

JG Summit is one of the largest and most diversified conglomerates in the Philippines with a market capitalization of $6.4 billion. It has business operations in food and beverages under listed Universal Robina Corporation, property development under listed Robinsons Land Corporation, air transportation under listed Cebu Pacific, banking and financial services and petrochemicals. JG Summit also holds core investments in telecommunications and real estate through its stakes in telecom giant Philippine Long Distance Telephone Company and Singapore’s United Industrial Corp. Ltd, respectively.

Originally posted at 07:43 am | Thursday, January 17, 2012

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