First Pacific unit raises $400M in 10-year bonds

A unit of Hong Kong-based First Pacific Co. Ltd. led by businessman Manuel V. Pangilinan has raised $400 million from the group’s inaugural 10-year international bond offering.

The bonds will be issued by First Pacific’s subsidiary FPC Treasury Ltd. and unconditionally and irrevocably guaranteed by First Pacific, a Southeast Asian-focused holding firm with principal business interests relating to telecommunications through Philippine Long Distance Co., infrastructure through Metro Pacific Investments Co., consumer food products through IndoFood Sukses Makmur Tbk of Indonesia, and natural resources through Philex Mining Corp.

The offering represented First Pacific’s first 10-year unsecured bond issue and was warmly received by the market. A final order book of more than $3 billion was achieved from 160 “high-quality” accounts, equivalent to an oversubscription of more than 7.5 times, allowing First Pacific to upsize the bond offering from its initial target of $300 million, HSBC said in a statement. HSBC and Mizuho acted as joint lead managers and joint bookrunners in this transaction.

“Despite competing supply and the risk of geopolitical instability arising, the execution of the transaction was done intraday, thereby minimizing First Pacific’s exposure to market risk,” said Wick Veloso, president and chief executive of HSBC Philippines.

HSBC reported that the transaction had seen strong momentum early on in execution, citing strong indications of interest from both onshore and international Asian investors as well as interest from European accounts. The books were covered within an hour of announcement of the initial price guidance.

Veloso said that of the total order book of $3.1 billion, investors based in Asia accounted for 84 percent while 16 percent came from Europe.

“First Pacific was able to aggressively revise its price guidance to eventually price through its curve at 4.5 percent, representing the lowest coupon achieved by First Pacific to date on the back of the strong order book momentum,” HSBC said.

Proceeds from the bond deal will be used by First Pacific for the refinancing of existing debt.