Globe to issue up to P5-B retail bonds to fund projects

Ayala subsidiary Globe Telecom is undertaking a P4-billion to P5-billion retail bond issue in the first quarter of 2009 to finance part of the company’s capital expenditure budget as well as other financial requirements.

Globe chief finance officer Delfin Gonzales said the company is currently taking steps to diversify its sources of external funding. Aside from the bond issue, the company is also looking at getting funding from export credit agencies.

The company has already filed an application with the Securities and Exchange Commission (SEC) for the offering of a total of P10 billion in bonds for a period of 12 months from the time the issue is approved by the SEC.

However, only P4 billion to P5 billion will initially be tapped during the first quarter of next year, with the balance of P5 billion to P6 billion to be issued depending on how the market turns out next year. “This will allow us to save two months (for approvals) for future bond issuances and gives us a facility to quickly tap the market in the future,” Gonzales pointed out.

The issue manager for the bond issue will be BPI Capital, also part of the Ayala group.

At the sidelines of yesterday’s third quarter briefing, Globe president and CEO Gerardo Ablaza revealed the company’s capex budget for 2009 will be slightly lower than this year’s $400 million to $420 million, as Globe takes on a more prudent view next year until such time that the market stabilizes.

Ablaza said in prioritizing the 2009 capex, the spend will be calibrated to developments in both the consumer and credit markets.

He added that part of Globe’s capex for next year will still be financed via internally generated funds.