SEC clears AG Finance IPO, Globe Telecom’s P7-B bonds

MANILA, Philippines - The country’s corporate watchdog has given its approval for two companies to raise fresh funding from the capital markets.

The Securities and Exchange Commission (SEC) has allowed AG Finance Inc. to list in the local bourse and cleared Globe Telecom’s plan to sell P7 billion worth of fixed-rate bonds.

AG Finance of the King family is expected to be the fifth company to debut in the stock market this year.

Specifically, AG Finance will sell 68.074 million shares worth between P1.91 to P2.20 each through an initial public offering (IPO) that can raise up to P150 million in fresh funding.

Final pricing is scheduled on July 24, which will be followed by the public share sale on July 29 and listing in the Philippine Stock Exchange’s main board on Aug. 9.

“The net proceeds that will be received from the IPO will be used to finance the company’s professional and skilled overseas Filipino workers’ (OFW) loan portfolio expansion program,” AG Finance said.

It will also pay P37 million in existing loans with China Banking Corp. that carries an interest rate of six percent per annum.

AG Finance said it will spend P47 million for its OFW loan portfolio expansion and P53 million for loans to professional skilled workers.

AG Finance, incorporated in 2001, is into microfinance and consumer loans targeting Filipinos here and abroad. It provides short term, unsecured credit facilities to permanent rank-and-file employees of medium-size Philippine firms.

In 2003, the company also expanded its market coverage to professionals and skilled workers in North America and the Middle East.

Profits of AG Finance rose seven percent to P43.187 million last year from P40.264 million a year ago, driven by an 11-percent growth in net interest income to P78.55 million from P70.48 million in the previous year.

Three firms have so far debuted in the local bourse: Philippine Business Bank, Asia United Bank and Del Monte Pacific Ltd. Harbor Star Shipping Services Inc.’s P593-million IPO is scheduled next month.

Meanwhile, Globe has secured the SEC’s approval to sell seven- and 10-year fixed-rate bonds with an aggregate amount of P7 billion. The seven-year bonds will carry an interest rate of 4.8729-5.1729 percent while the 10-year bonds will have an interest rate of 5.0708-5.3708 percent based on July 3 figures.

The telecommunications unit of the Ayala conglomerate said the bond issuance will support the $210-million spending for network and IT transformation initiatives and $290-million investment for fixed-line network, submarine cable facilities, IT infrastructure and other general expenses.

Globe tapped BPI Capital Corp. as issue manager and BPI Capital Corp., BDO Capital & Investment Corp., Hongkong and Shanghai Banking Corp. Ltd., and ING Bank N.V. as joint lead managers and bookrunners.