Globe Telecom, a leading telecommunications company in the Philippines, successfully return to the offshore bond market, pricing on July 16 a dual-tranche offering totalling US$600 million. The transaction is the company’s first foray in the G3 bond market since 2004 as it took advantage of the favourable interest rate environment to diversify its investor base.

The Reg S unrated deal was split equally at US$300 million each, with the 10-year tranche paying a coupon of 2.50% with a spread of 190 basis points (bp) over US Treasuries. This was 40bp tighter than the initial price guidance in the 230bp area. The other tranche is for 15 years and carries a coupon of 3% with a spread of 245bp over US Treasuries, or 35bp inside the initial price guidance of 280bp.

The final order book was 6.5 times oversubscribed, enabling Globe Telecom to print the deal tighter than the initial price guidance. The pricing for the 10-year tranche represents the lowest-ever yield for an unrated 10-year US dollar issuance globally and the tightest spread ever for any unrated corporate US dollar bond in Southeast Asia.

On the other hand, the 15-year tranche was the longest-ever tenor for an unrated corporate US dollar offering globally, according to Dealogic.

Globe Telecom president and CEO Ernest Cu says the deal enables Globe Telecom to maintain its momentum and enhance its network to deliver on its commitment to provide first-world  internet connectivity in the Philippines.

Proceeds from the issuance will be used to finance Globe Telecom’s capital expenditures, refinance maturing and/or existing obligations, and for general corporate requirements.

HSBC and J.P. Morgan were the joint global co-ordinators for the transaction, as well as joint bookrunners and lead managers, along with BPI Capital Corporation.

Globe Telecom last accessed the US dollar bond market in July 2004 when it launched a quick US$100 million tap of its then existing US$200 million 9.75% 2012 bond.

For the three months ended March 31 2020, Globe Telecom recorded total revenues of 36.88 billion pesos (US$723 million) and a net income attributable to equity holders of 6.58 billion pesos.