Globe raises $600M from equity securities offer

Globe Telecom Inc. has raised from the sale of equity securities abroad $600 million, which it would use to finance network upgrades and to pay off debts.

Globe on Wednesday announced its return to the international capital markets after its dual-tranche US dollar-denominated senior notes issuance in 2020.

The $600-million fundraising involves five-year dollar-denominated senior perpetual capital securities. The securities, which will be listed in Singapore, was priced at 4.2 percent to be paid semiannually.

“The issuance reaffirms the international investment community’s confidence in the company’s strong business fundamentals and mobile market leadership,” Globe CEO Ernest Cu said in a statement.

“The success of the offering supports our efforts to expand and enhance our core business and enable our efforts in building a robust digital ecosystem in the country,” he added.

According to Globe, HSBC and J.P. Morgan acted as joint global coordinators, and HSBC, J.P. Morgan and BPI Capital Corp. acted as joint lead managers and joint bookrunners. China Bank Capital Corp. acted as domestic lead manager.

Strong demand

The company said the offer was met with strong demand, with final orders exceeding demand by three times.

Globe said this also allowed the final price to be cut by 30 basis points from the initial price guidance of 4.5 percent.

The telco highlighted other features of the deal, saying it was the “tightest pricing for an equity-accounted senior step-up perpetual from the Philippines during the pandemic and the second tightest ever.”

Globe noted that transaction thus joined other Philippine equity issuers as the largest size raised in a single tranche under this structure.

“We are extremely delighted with the outcome of the securities offering,” Globe chief finance officer, treasurer and chief risk officer Rizza Maniego-Eala said in the same statement.

“The outstanding success of the transaction underscores global investors’ belief in Globe’s strength as a business. This offering was an important milestone in our continuous engagement with our investors and achieves our objective to strengthen Globe’s position in the capital market,” she added.

Given strong demand for internet-related services, Globe said it would raise its full-year capital spending target to P76 billion from P70 billion.

From January to June, Globe recorded a core profit increase of 19 percent to P13.2 billion, while total service revenues hit P75.5 billion, up 4 percent.