Hong Kong-based investment management and holding company First Pacific Company on September 3 priced a US$350 million bond offering as part of its ongoing liability management programme.
The Reg S seven-year unrated issue was priced at par to yield 4.375%. The coupon was the lowest for a senior unsecured US dollar bond deal achieved by First Pacific and successfully introduced the company’s credit to a significant number of new investors. The offering also represented the largest bond deal by First Pacific in seven years and was able to price inside the company’s existing shorter-dated bonds.
“This bond offering is an important component of our pro-active liability management,” says First Pacific managing director and CEO Manuel Pangilinan. “Notwithstanding the challenging conditions in financial markets at this time, the over three times subscription reflects the strong demand and confidence investors have in First Pacific. We are pleased with the results of this exercise, which significantly lengthens our debt maturity profile.”
The proceeds will be used to repay and refinance the company’s existing borrowings and will extend its average debt maturity profile to over four years.
The bond, issued through FPC Resources Limited, is guaranteed by First Pacific and includes an option for the company to call the bond after four years. Mizuho Securities Asia and UBS are the joint global coordinators and bookrunners for the transaction, as well as joint lead managers along with SMBC Nikko Capital Markets. BPI Capital Corporation, China Bank Capital Corporation, PNB Capital and Investment Corporation, andUnionBank of the Philippines acted as the Philippine domestic lead managers for the deal.
With operations located across Asia Pacific, First Pacific’s principal businesses are in consumer food products, telecommunications, infrastructure and natural resources.
As of June 30 2020, First Pacific head office had cash on hand of about US$350 million, which was principally earmarked for repayment of a US$252 million bond maturing in September this year. This is the only head office borrowing falling due in 2020.
