Lopez-led First Philippine Holdings Corp. is set to retire P7.48 billion worth of debt as part of a strategy to pare down servicing cost.
In a disclosure to the Philippine Stock Exchange Friday, First Holdings said its board had approved the redemption of all outstanding 43 million series-B preferred shares. The preferred shares, issued in 2008, have a peso value of P4.3 billion.
At the same time, the First Holdings board approved the prepayment of the remaining fixed-rate corporate notes (FXCNs ) consisting of 7- and 10-year notes amounting to P3.18 billion.
On the preferred shares, First Holdings has the option to redeem all the shares on the fifth anniversary of issue date, which falls this 2013.
“[First Holdings] is exercising its option to redeem the P4.3 billion in preferred shares that were originally issued in 2008. It will be refinanced with lower cost debt to take advantage of favorable capital market conditions,” company executive vice president and chief finance officer Francis Giles Puno said.
In connection with the redemption and subject to regulatory requirements, the First Holdings board also approved the payment of a cash dividend on the series-B preferred shares, consistent with the firm’s contractual obligations.
“We are also exercising [First Holdings’] right to prepay a P3.1-billion note facility that was issued in 2007. The proceeds for prepayment will be funded partly by internal funds and through the issuance of P5 billion of lower cost term debt to take advantage of favorable capital market conditions,” Puno said.