Smart refinancing P5.5B in loans
Smart Communications Inc. is refinancing P5.5 billion worth of loans to take advantage of the low-interest-rate environment.
In a statement, Smart said it would issue five- and 10-year fixed rate notes by next week to raise the amount needed for the refinancing plan.
First Metro Investments Corp., a unit of Metropolitan Bank & Trust Co., is the transaction’s lead arranger and sole bookrunner.
“With the current low level of interest rates, the transaction is expected to result in substantial savings for Smart,” the company said.
Smart said the notes were 1.3 times oversubscribed with P7.4 billion worth of orders, indicating strong demand.
Annabelle Chua, chief financial officer of Smart parent firm Philippine Long Distance Telephone Co. (PLDT), said the outcome showed the market’s confidence in Smart’s position as the leader of the country’s telecommunications industry.
The lenders were a mix of commercial and savings banks, trust banking groups, insurance companies and investment funds.
“The notes were well received by the market with an oversubscription on its planned issue size. This is yet another significant milestone for the company,” First Metro president Juanchito Dispo said in a statement.
“Despite these difficult times and with quality remaining to be an investor’s primary concern, this deal can be deemed a success by any measure. The balanced mix of participating lenders confirms high investor confidence in Smart’s future prospects,” he said.
Through Smart and recently acquired mobile brand Sun Cellular, the PLDT group corners two-thirds of the country’s telecommunications market in terms of subscribers and revenues.
PLDT’s profit, however, slipped by 21 percent in 2011 to P31.7 billion, following the impairment of P8.5 billion worth of network equipment that were replaced in ongoing network upgrades.
Core profit, which excludes these accounting losses, reached P39 billion, 7 percent lower year on year. This year, core profit is expected to fall further to about P37 billion due to spending increases to support the growth of its broadband business.—Paolo G. Montecillo
