Gokongwei group-led JG Summit Holdings has raised $600 million from a warmly-received offshore bond offering, marking the largest 10-year bond deal carved out of the Philippines in recent years.
The 10-year bond issuance achieved a record low interest rate for an unrated Philippine corporate issuer. It also was the largest 10-year Philippine corporate offshore bond deal since 2013.“Its strong credit profile and scarcity value allowed JG Summit to achieve a yield of 4.125 percent per annum—the lowest for unrated Philippine corporate for 10 years,” said Lauro Baja, head of Asia-Pacific global capital markets at UBS.
UBS, Credit Suisse and Standard Chartered Bank were the joint bookrunners and joint lead managers for the unrated Regulation S offering.
Regulation S securities refer to bonds or stocks that are exempted from certain registration requirements for as long as they are not offered, sold or delivered within the United States.
The issuer of the bonds was JGSH Philippines Ltd., an offshore subsidiary of JG Summit held through JG Summit Philippines Ltd. The fixed-rate notes were guaranteed by the parent conglomerate.
This bond deal also marked JG Summit’s return to the offshore bond market after a seven-year hiatus. In January 2013, JGSPL issued $750 million worth of 10-year senior unsecured notes at an interest rate of 4.375 percent a year. JG Summit’s new offering was oversubscribed by over four times the base offer, with the order book reaching over $2.6 billion. As such, the issuance was upsized from the earlier target of $500 million.More than 130 investors participated in the book-building. Asian investors accounted for about 86 percent of the subscription, while the remaining 14 percent came from Europe.Proceeds from the offering will be used for general corporate purposes of JG Summit, which has interests in food and beverage manufacturing, property development, petrochemicals, aviation and banking. It has portfolio equity in PLDT, Manila Electric Co. and UIC in Singapore. —Doris Dumlao-Abadilla INQ