Smart inks P1-B loan for GSM expansion

Smart Communications, Inc. has signed a P1-billion syndicated term loan facility arranged by Citicorp Capital Philippines Inc. under the wholesale lending program of the Development Bank of the Philippines (DBP) and Japan Bank for International Cooperation (JBIC) together with various other financial institutions for Phase 5 of its GSM network expansion.

The facility was arranged by Citibank, N.A.

The new facility comprises the peso component of a multi-tranche loan facility that, inclusive of a $195-million loan, totals approximately $215 million.

The peso loan agreement was signed last Thursday by Smart president and CEO Napoleon L. Nazareno on behalf of the company.

When taken together with the $195-million dollar tranche signed last June 8, this facility is the largest fund raising activity ever undertaken by Smart. The amount raised for this GSM Phase 5 facility is approximately equivalent to the total amount raised for GSM Phases 1 to 4.

Participants in the peso loan are Citibank, N.A., the DBP Retail Lending Group, SMBC Metro Investment Corp./Metro Bank, the DBP Retail Lending Group, Fuji Bank and Asia United Bank and Fuji Bank.

The "landmark" agreement is one of the biggest facilities granted this year by JBIC in coordination with the program lending sector of the DBP.

"Clearly, the success of the fund raising exercise is a demonstration of the strong support and solid confidence in Smart by the Japanese government and the institutions lending to the company for the first time, "Peter B. Eliot, relationship management head of Citibank, said.

In his remarks during the signing ceremony, Nazareno said the proceeds of the loan facility will enable Smart to accelerate the expansion of its nationwide digital cellular network to meet the requirements of its rapidly growing subscriber base.

"We have succeeded in establishing Smart as a powerful GSM brand and we are now beginning to reap the initial returns of our efforts," he said.

Smart is the leading wireless operator in the Philippines with approximately 3.5 million subscribers as of end-March 2001. Its GSM network currently has capacity for over five million subscribers, with 1,545 base stations covering nearly 600 cities and municipalities.