PLDT may hike amount of notes offer

Telecommunications industry leader Philippine Long Distance Telephone Co. (PLDT) may increase the amount of its notes offering from an earlier planned $350 million due to an expected huge demand for the offer.

The STAR learned that PLDT officials, led by president and chief executive officer Manuel V. Pangilinan and his finance group, as well as representatives from wireless subsidiary Smart Communications, are now on the final stretches of their international roadshow presentation to boost interest among financial investors to the company offering.

After talking to European investors, the PLDT group is now in the United States doing a similar presentation. PLDT officials said that the reception to the offer ‘is very good and that there is big chance that the offer amount will be increased.’

PLDT earlier announced that it is offering $350 million worth of 10-year fixed rate notes due 2012 and five-year fixed rate notes due 2007, net proceeds of which will be used to repay the company’s maturing loan obligations now until 2004.

The company, however, got approval from government financial agencies to offer up to $500 million worth of notes.

After the roadshow presentation, PLDT officials, together with the underwriters for the notes offering, will make a final determination on the final amount of notes that will be offered, as well as the pricing.

PLDT was supposed to undertake the notes offering late last year, but this was deferred due to the terrorist attacks on the United States.

Partly due to expectations of the huge success of the offering and with the expected approval by the Japan Bank for International Cooperation (JBIC) board of an $80 million loan, PLDT has shelved plans to sell part of its stake in Smart.

PLDT hopes to raise around $1.3 billion to pay for its maturing loan obligations between 2002 and 2004 from various sources, including the notes offering and new loans to repay existing ones.

The telecom firm was able to tap earlier a $149 million loan from the German financing agency KfW. It also expects to secure approval in the next few weeks for an $80 million loan from JBIC.

According to Pangilinan, they hope to raise half of the $1.3 billion, or around $650 million, from internally generated funds, including dividends from its investment in Smart.

Officials said that including the proceeds from the notes offering, PLDT is also assured of raising the other half from external sources, including the JBIC and KfW loan.

As this developed, PLDT has extended the early repurchase date for its cash tender offers to purchase any and all of its outstanding 8.5 percent notes due 2003 and 10.625 percent notes due 2004 to 5 p.m. New York time to May 2,2002 from the original schedules of April 25.

The extension is offered to permit holders, particularly retail investors, more time to receive a premium for tendering early and waiving their rights to withdraw tendered notes.

PLDT earlier said that it is initiating cash tender offers on April 11, 2002, and the originally scheduled early repurchase date was April 25, 2002. Each offer will still expire on its originally scheduled date at 5 p.m., New York City time, on May 15, 2002.

It said its obligation to accept for purchase and pay the tender offer consideration, is subject to and conditioned on certain financing and other conditions as described in the Offer to Purchase, which is dated April 11, 2002. Credit Suisse First Boston Corp. (CSFB) and Morgan Stanley & Co., Inc. (Morgan Stanley) are the dealer managers for the offers.