First Pacific raises $400 M via bonds

MANILA, Philippines - Hong Kong-based First Pacific Co. Ltd., through its subsidiary FPC Treasury Ltd., has raised $400 million through the issuance of 10-year offshore bonds.

In a statement, HSBC, the bond issue’s lead manager along with Mizuho Bank, said issuance last April 10 was seven times oversubscribed, with offers hitting $3 billion.

“A final order book of over $3 billion was achieved from 160 high quality accounts, equivalent to an over 7.5x oversubscription, allowing First Pacific to upsize the bond offering from its initial target of $300 million,” HSBC said.

HSBC said the bonds would be unconditionally and irrevocably guaranteed by First Pacific.

First Pacific is the investment management and holding company headed by Manuel V. Pangilinan. Its principal business interests in Southeast Asia are in the areas of telecommunications through Philippine Long Distance Co., infrastructure (Metro Pacific Investments Co.), consumer food products (IndoFood Sukses Makmur Tbk) and resources (Philex Mining Corp.)

According to HSBC, this is also the first 10-year unsecured bond issuance of First Pacific.

“The transaction saw strong momentum early on in execution on the back of strong indications of interest from both onshore and international Asian investors as well as interest from European accounts, with books covered within an hour of announcement of the initial price guidance,” said Wick Veloso, president and CEO of HSBC Philippines.

Veloso said the overwhelming response to the bond issue enabled them to price it at the lowest interest rate.

“First Pacific was able to aggressively revise its price guidance to eventually price through its curve at 4.5 percent, representing the lowest coupon achieved by First Pacific to date on the back of the strong order book momentum,” he said.

“Despite competing supply and the risk of geopolitical instability arising, the execution of the transaction was done intraday, thereby minimizing First Pacific’s exposure to market risk,” Veloso added.