Globe eyes P15B retail bond float

Globe Telecom is planning a P15-billion retail bond float—likely in several tranches—this year as the company seeks to double capital expenditure (capex) spending in line with the modernization of its nationwide network.

In a disclosure to the Philippine Stock Exchange, Globe said this would be offered to both institutional and retail investors.

“The bond program is expected to provide Globe with the option to tap the retail market in one or more tranches over the next 12 months,” Globe said. “The applicable registration statement and other papers will be filed with regulators in due course.”

Last Friday, the company said capital expenditures for 2011 totaled $397 million, a decline of 11 percent from the previous year. Capex for the past year included amounts to expand and upgrade the firm’s broadband and mobile networks and for the deployment of its new fourth-generation (4G) mobile network in key areas nationwide.

Globe said investments made last year paid off, putting the firm in a better position to compete with bigger rival Philippine Long Distance Telephone Co. (PLDT).

Globe ended 2011 with 30.04 million subscribers, up 13 percent from the previous year.

This came as Globe announced a two-year, $790-million network modernization and information technology (IT) transformation program, bulk of which would be spent in 2012.

The company said total capex for the current year was expected to reach between $750 million and $800 million. About $530 million of this was earmarked for the company’s network. Other capex needs include provisions for fixed-line data systems, upgrades in the capacity of its direct subscriber line (DSL) services in selected regions and submarine cable investments.

Globe also booked a net income of P9.8 billion for 2011, up a modest 1 percent from 2010, with higher marketing costs and the effects of foreign exchange movements weighing the company down. Core profit, which strips out mark-to-market losses, rose 11 percent to P10 bllion.