Globe seeks to raise P20B from bond issuance

Globe Telecom is making future plans to tap the debt market for up to P20 billion, a stock exchange filing on Monday showed.

Globe disclosed its board approved the filing of a three-year shelf registration of debt securities with the Securities and Exchange Commission.

Companies take this route to comply with requirements related to the offering of new securities even before they have determined the exact timing of the issuance. This allows some, for example, to react quickly to changing market conditions.

Globe said the principal amount was set at a maximum of P20 billion, and offers can come in one or several tranches over the three-year period. No other details were provided.

“The purpose of which is to allow Globe within a three-year period to go to the market to offer retail bonds.  Currently, no decision has been made as to when this offer will take place,” Yoly Crisanto, head of corporate communications at Globe, said in a text message.

Globe’s plan was announced as telco players in the country are anticipating a more challenging environment due to increasing competition and capital investments.

Globe and main rival PLDT Inc. set aside about $1 billion in capital expenses for 2016 and spending in the next few years is expected to be elevated.

Adding a layer of uncertainty were calls by President Duterte for telcos to improve services and keep prices low—else, he would bring in more foreign competition to the Philippines.

Globe said profit at end-September last year dipped 8 percent to P11.7 billion year-on-year, even as revenues rose 7 percent.

Higher spending last year also came as both telcos rolled out more frequencies, including those in the 700 megahertz band, obtained following a co-use agreement with San Miguel Corp.’s telco unit. That unit was eventually acquired by both PLDT and Globe as part of a P70-billion deal sealed in May 2016.