PLDT plans to issue P8B in long-term debt paper

MANILA, Philippines—Local telecom giant Philippine Long Distance Telephone Co. plans to raise as much as P8 billion from the sale of long-term debt paper to selected institutional investors.

PLDT has sounded off plans to issue up to P8 billion corporate notes with tenors ranging from five to 10 years, several banking sources told the Inquirer.

Unlike retail bonds, which are sold through a public offering and must go through a more tedious registration process at the Securities and Exchange Commission, corporate notes are a quicker fund-raising option for top-tier corporations as they are sold to no more than 19 selected institutional investors.

Asked about the planned issuance of P8 billion in corporate notes, PLDT spokesman Ramon Isberto said: “We are in preliminary discussions for possible participants in a refinancing facility.”

Based on PLDT’s financial statement as of end-June, PLDT has P5.99 billion in maturing debt, of which P4 billion is denominated in dollars and P1.95 billion in the local currency—from July to December this year. Scheduled debt maturities for the coming years are P12.36 billion for 2013, P24.87 billion for 2014, P15.27 billion for 2015 and P55.97 billion for 2015 onwards.

By refinancing some of its obligations, PLDT will be able to better manage its debt stock. As of end-June, PLDT had P100.3 billion in long-term debt, of which P13.9 billion is current or maturing within a year.

PLDT is the dominant player in the local telecom sector with a 68-percent share of the cellular phone market, 64 percent of broadband Internet and 65 percent of fixed-line business.

The telecom giant is also the first Philippine company to merit an investment grade rating from all three major international credit watchers—Standard & Poor’s, Moody’s and Fitch Ratings. With the rating, it enjoys a higher debt rating than the Philippine government, which is rated at one to two notches below investment grade by the same credit watchdogs.

PLDT is also expanding into multimedia services through an investment in Mediaquest Holdings, owner of direct-to-home Cignal TV and television network TV5 through its wholly owned subsidiary ePLDT.