Globe Telecom signs P1.085-B notes facility

Globe Telecom recently signed a P1.085 billion notes facility comprised of P835 million fixed rate corporate notes (FXCN) and P250 million floating rate corporate notes (FRCN).

The facility, which raised financing in three-, five- and 10-year maturities, is Globe’s maiden transaction in the Philippine debt capital market. The proceeds of the facility will be used for the expansion of Globe’s existing facilities and related working capital purposes.

The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) acted as the sole bookrunner and arranger for Globe’s notes facility.

Globe’s notes facility was met with strong demand from insurance companies, banks and retirement funds. The Dutch auction was used for the pricing and distribution of the notes, therefore allowing Globe to achieve tighter credit spreads on most tranches. The resulting credit spreads of the three-, five-and 10-year FXCNs were 0.358 percent, 0.314 percent and 0.579 percent, respectively, over the relevant treasury benchmarks. The three- and five-year FRCNs, on the other hand, achieved margins of 1.5 percent and 2.0 percent respectively. The transaction was made available only to qualified buyers.

Delfin C. Gonzales Jr. Globe Telecom chief financial officer, said: "While Globe’s notes issue was launched amidst difficult market conditions, investors have shown strong support for Globe’s first domestic issue. This notes issue has allowed us to expand both our investor base and the markets we can look to for our future financing needs."

Rafael Jose Consing Jr., head of Capital Markets, HSBC in the Philippines, said: "HSBC is pleased to have arranged this very important transaction for Globe. We believe Globe’s notes facility will have a positive impact on the domestic debt capital market as it expands the available avenues for investment through the FRCN. The issue of 10-year FXCN, meanwhile, adds to the variety of credit-worthy names in the long end of the corporate yield curve."