Globe approves P20-B bond issue

MANILA, Philippines - Globe Telecom Inc. is planning to sell retail bonds worth P20 billion over the next three years.

In a disclosure to the Philippine Stock Exchange yesterday, the Ayala-led telco said its board of directors approved the filing of a three-year shelf registration with the Securities and Exchange Commission of up to P20 billion in principal amount of debt securities.

Globe said the debt securities may be issued in one or more tranches.

“It’s a standard disclosure, the purpose of which is to allow Globe within a three-year period to go to the market to offer retail bonds,” Yoly Crisanto, Globe senior vice president for corporate affairs said in a text message.

Crisanto said no decision has been made as to when the offer would take place.

She also said there are no details yet on where proceeds for the retail bonds would be used.

Last year, Globe entered into a P20 billion loan facility with Metropolitan Bank and Trust Co. to finance the acquisition of half of the telco assets of San Miguel Corp. (SMC).

Globe and PLDT Inc. purchased the telco business of SMC for P70 billon in May last year, a move intended to gain access to frequencies and deliver improved services to subscribers.

Globe likewise signed a P7 billion loan from the Union Bank of the Philippines last year to finance its capital expenditures.

The telco’s total capital expenditures amounted to $1 billion last year.

For the January to September period of last year, Globe’s net earnings reached P11.72 billion, down 17 percent from P14.14 billon in the same period in 2015 due to higher non-operating charges and depreciation, as well as costs related to the transaction with SMC.