First Philippine Holdings Corp., the power and real estate holding firm of the Lopez family, has sealed a deal to refinance old, more expensive debt with fresh funds borrowed at lower rates.
In a disclosure to the Philippine Stock Exchange, FPH said it had issued floating rate notes worth P4.8 billion, which will mature in 2018.
“FPH is taking advantage of the improved bank appetite as well as debt market conditions by refinancing its dual currency floating rate notes maturing in 2012 and 2014, in order to extend loan maturity timetables and smoothen out repayment schedules,” the holding firm told the bourse.
The notes issue was arranged by BDO Capital and Investment Corp., which acted as its sole arranger, and several financial institutions consisting of Banco De Oro Unibank Inc., Maybank Philippines Inc., Rizal Commercial Banking Corp. and Union Bank of the Philippines.
The company explained that it effectively borrowed P4.8 billion under the new facility to repay in full the $36.6 million and the P3.2 billion outstanding principal of its 2007 dual currency floating rate notes.
“This new facility should provide FPH with more flexibility and allow the execution of identified strategic initiatives in possible growth opportunities such as indigenous power and property development,” the company said.
Approximately 88 percent of FPH’s revenues come from electricity sales through its First Gen Corp. unit. This amounted to P27.6 billion in the first half of 2011.
FPH also owns a 49-percent stake in property developer Rockwell Land Corp., which contributed P43 million in sales during the same six-month period.
The holding firm reported a net loss of P284 million in the first half, compared with profits of P24.9 billion in the same period last year, as the one-time gain from the sale of a stake in Manila Electric Co. last year bloated its previous year’s revenues.