Gokongwei-led conglomerate JG Summit Holdings Inc. has completed a P30-billion retail bond offering, the biggest bond deal seen in the country in the last four years.
The bonds were listed on the local fixed-income platform of Philippine Dealing and Exchange Corp. on Thursday.
JG Summit’s new bond issue consisted of three tenors, the biggest of which amounting to P24.51 billion went to the tranche of five years and six months with a coupon rate of 5.2317 percent a year. Another P5.31 billion was raised from the issuance of seven-year bonds with a coupon rate of 5.2442 percent a year and P176.34 million from 10-year bonds with a coupon rate of 5.3 a year.
“JG Summit has a strong and well-diversified business portfolio. Our core businesses and investments are all strong businesses with leading market positions in large growing markets. They provide us with a robust cash flow that helps us fund our growth businesses and other new businesses we are looking to invest in,” JG Summit president Lance Gokongwei said.
“We congratulate JG Summit for raising this P30-billion bond issuance at the tightest end of its pricing guidance on the five-, seven- and 10-year tenors. With overwhelming demand across institutional and retail investors, the issuer had to upsize the transaction from the original announced P20 billion,” HSBC chief executive Wick Veloso said.
BDO Capital and Investment Corp., BPI Capital Corp., First Metro Investment Corp. and Standard Chartered Bank were also joint underwriters. The co-lead underwriters were RCBC Capital Corp., United Coconut Planters Bank, Development Bank of the Philippines and SB Capital Investment Corp. China Bank and Land Bank were also participating underwriters.
Net proceeds from the bond issuance will be used by the company to partially finance its acquisition of Manila Electric Co. shares and for general corporate purposes.
The issuance marked JG Summit’s return to the local bond market for the first time since a P9-billion issue in 2009.
The JG Summit bonds have obtained a PRS Aaa rating from the Philippine Ratings Services Corp., which cited JG Summit’s “strong liquidity, sound capitalization, solid market position of its core business and the good quality of its management.”
Cesar Crisol, president of PDEx’ parent PDS Group, said: “The entry of the JG Summit bonds provides investors with another highly rated instrument for which to diversify their bond portfolios. And on this note, we salute JG Summit for returning to the market with this issuance. Your endeavors toward the capital market are an additional medium to make life better for every Juan.”
“And as a market infrastructure, we assure you of our equal commitment to investor protection, efficient market systems and responsiveness to your needs. This organized secondary market strives to provide the environment for your bondholders to invest and divest your instruments through licensed intermediaries with confidence,” Crisol said.