Financial regulator green lights Globe’s PHP7bn bond plan for Bayan

10 Jul 2013

The Philippines’ Securities and Exchange Commission (SEC) has endorsed Globe Telecom’s plan to issue PHP7 billion (USD162.6 million) worth of retail bonds to help fund its investment in struggling fellow operator Bayan Telecommunication Inc (Bayan). Malaya Business News reports that Globe will issue the bonds before the end of July, which comprise seven-year fixed rate bonds due in 2020, and ten-year fixed rate bonds due in 2023.

As previously reported by TeleGeography’s CommsUpdate, last month Globe revealed plans to sell the retail bonds to fund its network modernisation programme, and its ongoing investment in Bayan. Speaking at the time, Globe CFO Albert de Larrazabal said his company had also been given the go ahead to sell a further PHP5 billion retail bonds (of the PHP15 billion sanctioned by its board). Around PHP10 billion of the bonds are currently trading on the local Philippine Dealing and Exchange Corp (PDEx) bourse. Ultimately, Globe intends to absorb Bayan into its own operation post-rehabilitation. The necessary court approval of the latter’s rehab plan is due imminently, with the Globe official noting that ‘if 70% of the debt [is] converted into equity, depending on how the plan is approved, [Globe] will have slightly in excess of 50% [of Bayan’s shares].’ Globe eventually intends to buy 100% of the ailing carrier.

Philippines, Globe Telecom (incl. Innove)