PDEx to list P15-B PLDT bonds this wk

MANILA, Philippines - The Philippine Dealing and Exchange Corp. (PDEx) has given dominant carrier Philippine Long Distance Telephone Co. (PLDT) the green light to list P15 billion worth of fixed-rate bonds this week.

Ma. Lourdes Rausa-Chan, PLDT corporate secretary, informed the Philippine Stock Exchange (PSE) that the seven and 10-year fixed rate bonds would be listed on PDEx on Feb. 6.

 â€œWe wish to advise that the application of the company to list its P15-billion fixed rate bonds due 2021 and 2024 has been approved by PDEx effective Feb. 6,” she said.

New York-based Moody’s Investors Service earlier said the fund raising activity of PLDT was credit positive as this would improve the debt profile by reducing foreign exchange risks.

Moody’s assistant vice president Yoshio Takahashi said the proposed bonds would help PLDT to further term out its debt maturity profile despite the moderate increase in its total outstanding debt.

“While the debt offering could modestly increase total debt outstanding in the near term, it will help PLDT to term out its debt maturity profile and reduce foreign exchange rate risk,” Takahashi said.

Of the total P110 billion outstanding debt of PLDT as of end-September, about 16 percent or P17.7 billion were due between the fourth quarter of last year and this year. About P4 billion were due in the fourth quarter of last year and another P13.7 billion this year.

PLDT intends to use the proceeds of the seven and 10-year bonds to fund its capital expenditures and refinance approximately 40 percent or P5.6 billion of its maturing debt this year.

With the new bonds, Takahashi said the total debt maturing beyond 2018 of PLDT would improve to over 40 percent compared to only 30 percent as of end-September last year.

Furthermore, he added that the refinancing would help reduce foreign exchange rate risk as the large majority of PLDT debt or P4.6 billion ($105 million) to be refinanced is US dollar-denominated term.

At end-September 2013, about 55 percent of PLDT’s total debt or P60 billion ($1.38 billion) were denominated in US dollars. Of the total amount, about 39 percent or $972 million were unhedged.

The Moody’s analyst said it is more important for PLDT to reduce its US dollar exposure as the peso weakened by 8.7 percent against the greenback last year.

Following the issuance, PLDT’s total debt would increase moderately this year but adjusted debt or EBITDA is likely to stay in the range of 1.5 times to 1.7 times.

Takahashi added that PLDT has $600 million in US dollar-denominated revenue and $169 million in US dollar-denominated cash at end-September last year.