PLDT Inc. roared back into the international bond market after almost two decades, raising $600 million following a fully-online investment roadshow amid the new coronavirus (COVID-19) pandemic.
On Wednesday (June 17), the telco giant announced it set the terms of its 10-year and 30-year bonds—the latter representing a landmark issuance for a non-government entity in the Philippines. The notes were priced at a fixed rate of 2.5 percent and 3.45 percent, respectively, and payable semi-annually.
The money will be used to refinance existing loans and pay for network upgrades, which are crucial as internet demand surges higher.
The pandemic is also forcing more people to work from home and rely on e-commerce, remote education and healthcare.
PLDT chair and CEO Manuel V. Pangilinan said the company’s last foray in the international bond market coincided with the Sept. 11, 2001 terror attacks in the United States.
“If one recalls, we were soon faced with a global crisis then, just as we are today. For the better part of those years, the road was mostly smooth, but there were bumps along the way which made our journey difficult,” Pangilinan said in a statement on Wednesday.
“I believe we have now assembled possibly the best management team in our history, one that will allow us to realize the extraordinary potential of our business as an integrated telco,” he added.
Global investors, including pension funds, banks and insurance companies mostly from Asia, swamped the offering, which was arranged by UBS AG Singapore and Credit Suisse (Singapore) Ltd.
Demand for the final offer hit $10.2 billion, or 17 times the issue amount, making it the largest order book size and oversubscription achieved in the country.
Lauro Baja III, head of UBS’ Manila operations, told the Inquirer the deal signalled investor confidence in PLDT and the Philippines.
“It’s great for the country to be able to achieve this type of transaction at such low yields and long tenors,” he said in an interview. Outside the Philippines, he said access to 30-year tenors is reserved for top-quality names.
As other companies look to raise money from local and offshore sources despite the pandemic, Baja said the deal “speaks volumes of what can be achieved by Philippine corporates in the international markets today.”
PLDT chief financial officer Anabelle Lim-Chua told reporters on Wednesday the timing was also ideal, given low interest rates in the US and the company’s growth prospects.
“That’s what they call the scarcity value. You’re not there issuing all the time so it became an attractive opportunity for investors,” she said.
PLDT has maturing debts in the second half of this year and in 2021. It also plans to prepay outstanding loans and partly fund capital expenditures of about P60 billion in 2020.
Edited by TSB
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