PLDT lists P15B in retail bonds

Philippine Long Distance Telephone Co., the country’s biggest telecommunications firm, on Thursday listed P15 billion in peso retail bonds.

The debt, listed on the Philippine Dealing and Exchange Corp., was met with strong demand from investors and proceeds of the issue would partly fund the company’s capital spending budget, estimated at P29 billion for 2014, a PLDT official said. This was about the same amount PLDT spent in the previous year.

The bonds, which have tenors of seven and 10 years at 5.225 percent and 5.281 percent, respectively, were more than twice oversubscribed, according to PLDT president Napoleon Nazareno.

“In the past, PLDT tapped bilateral loans and private placements for our financing requirements.  This time, we saw a unique opportunity to reach out to the retail investors as partners in our fundraising exercise,” Nazareno said during the listing ceremonies yesterday.

Due to strong demand, Nazareno said PLDT decided to increase the base offer from P10 billion to P15 billion. The deal was also priced at the tightest end of the pricing guidance of just 100 bps over the 7- and 10-year benchmarks, he said.

“With this issuance, PLDT is better positioned to further improve our network and services to our growing customer base,” he added.

Nazareno said the company remained on track to hitting its 2013 core profit target of P38.3 billion, representing a gain of about 2.7 percent over 2012.

PLDT said P12.4 billion was allocated for the seven year tranche, and the remaining P2.6 billion for the 10 year tranche.

In a separate statement, PLDT said its  inaugural bonds were rated by Credit Rating and Investors Services Philippines Inc. as “AAA” with a “stable” outlook, the highest on the scale.  PLDT is rated investment grade by three international rating agencies, such as Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.

Moody’s earlier said PLDT’s local retail bond issue was credit positive as “it will help PLDT to term out its debt maturity profile and reduce foreign exchange rate risk.”

First Metro Investment Corp. served as issue coordinator for the bonds, and is also a joint lead underwriter and joint bookrunner with BDO Capital & Investment Corp., BPI Capital Corp. and The Hong Kong and Shanghai Banking Corp. Ltd.