ABS-CBN signs P10-billion club loan to refinance debt, fund capex

MANILA, Philippines - Multimedia conglomerate ABS-CBN Broadcasting Corp. signed yesterday a P10-billion syndicated term loan agreement to refinance existing debt and fund capital expenditures.

ABS-CBN disclosed to the Philippine Stock Exchange that the loan facility was obtained from Bank of the Philippine Islands, Banco de Oro, Security Bank, Insular Life, Allied Bank and Allied Bank Savings, and Philippine National Bank and PNB Life.

 “The oversubscribed order book for our debt refinancing and new debt is a clear manifestation of how our partnership has grown over the years,” ABS-CBN chief finance officer Rolando P. Valdueza said.

Of the P10-billion total loan, P6.6 billion will be used to refinance debt while the remaining P3.4 billion will help fund the network’s capital expenditures in digital terrestrial TV infrastructure and continued expansion of its cable TV and other services.

The loan was structured as an unsecured and unsubordinated bullet and partly amortizing loan maturing in 2017, priced at a 65-basis points spread over the seven-year benchmark for the fixed rate portion of the loan, and over the three-month benchmark for the floating rate portion.

Consequently, ABS-CBN’s effective interest cost on all its interest-bearing debt goes down by about two percentage points, from which the company expects to generate savings in annual interest expenses of about P92 million.

Apart from the savings that will be generated, the new loan agreement also incorporates more relaxed covenants.

 BPI Capital Corp. acted as lead aranger and sole bookrunner for the transaction.