ABS-CBN said it has signed an underwriting agreement with ABN Amro Bank N.V., BPI Capital Corp., ING Bank N.V. and Societe General Asia Ltd. for a $120-million loan.
The loan will be channeled to refinance ABS-CBN's existing loans amounting to $90 million and for its investment in its cable affiliate Beyond Cable Inc. worth $30 million.
ABS-CBN chief financial officer Randy Estrellado said the loan is a vote of confidence in the company. "This agreement is a testament to the support of the financial community in the continuing efforts of ABS-CBN to improve its operations and strengthen its balance sheet," he said.
"This new loan facility will allow ABS-CBN to continue to grow its core businesses, leveraging its programming expertise across an expanded base of local and international audiences, via free-to-air, cable and satellite TV operations," Estrellado added.
The new loan will be secured by the company’s real estate properties and certain equipment and other assets, and will be guaranteed by ABS-CBN’s subsidiaries.
Estrellado said the company’s stable EBITDA (earnings before interest, taxes, depreciation and amortization) margins ensure it can meet all outstanding debt obligations. The network settled P1-billion worth of debts to creditors in April, effectively reducing its outstanding debts to P4.8 billion, of which another P1.1 billion is due within the year.
The repayment is estimated to improve ABS-CBN’s debt-to-equity ratio to 37 percent, from 44 percent as of end-December 2003.
Bulk of ABS-CBN’s long-term debt is its exchangeable notes facility agreement (ENFA) with local banks and financial institutions. The ENFA, which was executed in September 2002, is secured by a mortgage trust indenture over substantially all ABS-CBN’s assets.
Excluding the $120-million loan from the syndicate of private banks, Estrellado said ABS-CBN is expected to be debt-free over the next three years.