PLDT raises $600M in global bond float

By Arjay L. Balinbin, Reporter

STRONG investor demand welcomed PLDT, Inc.’s return to the offshore bond market after an 18-year absence.

The telecommunications giant on Wednesday told the stock exchange it raised $600 million from the issuance of 10-year and 30-year dual tranche senior unsecured fixed-rate notes.

PLDT said the notes drew combined final orders worth $10.2 billion, 17 times more than the amount it sold — the largest orderbook size for any Philippine issuer. Demand was strong, mostly from investors in Asia and Europe, it added.

“We are extremely gratified by the response of the international bond market to our return,” PLDT Chairman, President and Chief Executive Officer Manuel V. Pangilinan was quoted as saying in a statement. “The market’s overwhelming welcome only serves to validate PLDT’s record of resiliency and patented financial discipline over the years.”

IFR reported the $300-million January 2031 bond was priced at 99.39 with a coupon of 2.5% to yield 2.566% or Treasuries plus 180 basis points (bps).

The $300-million 30-year tranche was priced at 99.168 with a coupon of 3.45% to yield 3.495% or Treasuries plus 195 bps.

PLDT noted this was the “first ever 30-year offering for a non-government entity out of the Philippines.”

“Since we haven’t been around for such a long time, the interest then became very strong, that’s what we call the scarcity value. So because you are not there issuing all the time, it became quite an attractive investment opportunity for a lot of investors,” PLDT Chief Finance Officer Anabelle L. Chua said in a virtual interview.

On why it took 18 years for the company to return to the international capital market, Ms. Chua said: “What happened really in the last couple of years was … there were much more liquidity in the Philippine local market, longer tenors, and so it was easy to access.”

The rates in the local market had also been “quite attractive,” she added.

Now, Ms. Chua said PLDT wanted to take advantage of the historically low US interest rates.

“We also felt that we have a good story to tell. We are in a market which is very attractive for data take-up, and there’s the young population. A lot of Filipinos spend time online, and there’s a lot of growth in terms of data traffic. During the lockdown period, we saw how people really used a lot of data. Our traffic increased by about 25%,” she said.

Ms. Chua said PLDT is planning to use around $400 million from the bond proceeds to repay debt due in the second half of 2020 and in 2021, “and even selectively prepay some other debts.”

The remaining $200 million will fund PLDT’s capital expenditure (capex) requirements for this year and the following year, she added. The telco giant is allocating P63 billion in capex this year.

Ms. Chua said the company has no plans for another bond issuance for now.

“The good thing about this is in one exercise we were able to address the refinancing requirements for up to next year, so we have more time to plan how we want to tap financial markets after that,” she said.

Credit Suisse (Singapore) Limited and UBS AG Singapore Branch were the joint lead managers and joint bookrunners for the transaction.

PLDT is rated BBB+ stable by S&P, Baa2 stable by Moody’s and BBB stable by Fitch. S&P gave the dollar notes a BBB+ rating.

Shares in PLDT on Wednesday closed 0.25% lower at P1,220 apiece.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in ����ý through the Philippine Star Group, which it controls.