PDEx lists P9-billion fixed rate bonds of JG Summit

MANILA, Philippines - The Philippine Dealing and Exchange Corp. (PDEx) has approved the listing of P9 billion worth of fixed-rate bonds issued late last year by JG Summit Holdings Inc., the listed flagship holding firm of the family of taipan John Gokongwei.

The bonds, priced at 8.25 percent per annum, are due on Nov. 20, 2014 and will be listed on the country’s fixed income exchange on May 26.

JG Summit originally planned to issue P5 billion worth of bonds but raised it to P9 billion on strong demand from both institutional and retail investors.

ING Bank N.V.Manila Branch and SB Capital Investment Corp. were the joint issue managers and lead underwriters for the bond offering.

The bond issue was issued a PRS Aaa rating, which means that such obligations “are of the highest quality with minimal credit risk and that the obligor’s capacity to meet its financial commitment on the obligation is extremely strong.”

JG Summit, one of the largest and most diversified conglomerates in the country, is a holding company for a group of companies which includes Universal Robina Corp. (branded consumer foods, agro-industrial and commodity food products), Robinsons Land Corp. (property development and hotel management), Digital Telecommunications Philippines, Inc. (telecommunications), Cebu Air, Inc. (air transportation), JG Summit Petrochemicals Corp. (petrochemicals), and Robinsons Savings Bank (banking services).

Proceeds from the offering will be used to support the capital expenditure requirements of Digitel  (P6 billion to P8 billion) and Cebu Air (P2 billion to P4 billion).

Digitel is the country’s third largest provider of wireless public and private telecommunications services through Digitel Mobile Phils. Inc. (DMPI).

DMPI has entered phase 8 of its network expansion, which includes phase 2 of 3G cell site roll-outs in NCR, North Luzon and VisMin. It has projected total capital expenditure of $280 million this year, $222 million in 2010, $184 million in 2011.

Cebu Air has earmarked around P4 billion this year and P4.9 billion in 2010 to support its fleet expansion program.  It signed a purchase agreement for up to 20 additional new Airbus A320-200 aircraft comprising of 15 firm orders and five purchase options. The 15 firm orders are scheduled to be delivered starting 2010. 

JG Summit also intends to use a portion of the proceeds for investments in short-term instruments such as special savings, trust accounts or fixed income bonds, until such time that the funds need to be deployed for capital expenditure requirements of subsidiaries.