Globe Telecom eyes $100-M club loan

Mobile telephony leader Globe Telecom will tap the local market towards the end of the year for a $100-million syndicated loan to fully cover its $650-million capital expenditure budget for the year.

The plan comes on the heels of the successful raising of the company of $200 million from the sale to the international investment community of 10-year notes.

Globe chief finance officer Delfin Gonzales said yesterday that the company will draw down some $350 million from last year’s excess cash.

"We just completed the $200 million and we have about $350 million in facility that we have signed up last year that we can drawdown this year. Roughly, there’s about another $100 million that we are working on including some that are actually in documentation stages at this point. (It’s) basically syndicated loans but we are not doing another public transaction for debt," Gonzales said.

HSBC and Salomon Smith Barney are among the many underwriters being eyed by Globe to facilitate the syndicated loan.

HSBC and Deutsche Bank were the co-leader managers for the $200-million bond issue while Salomon was the lead manager of the deal. Proceeds of the said deal will be used to fund Globe’s wireless network expansion.

"They are one of several that we are considering although we have not signed any. We are talking about both peso and dollar facilities. There are some peso facilities that we are still studying now that involves some of the local banks, including foreign banks based locally, but the dollars essentially we talk to international banks," Gonzales said.

Depending on the lending rates, Gonzales said the company might even opt to raise more than $100 million if it will be to their advantage.

He stressed that there is no urgent need to start processing the loan as the company is fully covered at the moment. "We won’t do everything within the quarter because these are floating rates. Even if you get it at a low rate this quarter and the next repricing it may go up. It depends on the schedule that we follow. We just brought down the $300 million so we should probably spend that first before we drawdown any new facility. The need is actually for a much later use. We are working on it. We can sign up this loan but drawdown later on. It’s usually six months. It’s a six-month repricing" Gonzales said.

"I guess we are looking at some existing facilities. There are some probably more expensive than others. Some have shorter tenure than others. So, we may in fact opportunistically tap the market that would have better terms that what we already have. It does not mean that we will basically stop at $100 million. We may in fact raise it, cancel from the existing facilities if it’s not advantageous," he added.

Last year, Globe spent around $557 million for network and infrastructure expansion, 78 percent of which was allocated to the wireless business.

Globe also completed the acquisition of Isla Communications Inc., making the latter its wholly-owned subsidiary. The move paved the way for the entry of Globe of Deutsche Telekom (DT) as a strategic partner together with Singapore Telecom (SingTel).

When asked of any immediate plans by the company’s existing shareholders (DT, SingTel and Ayala Corp.) to infuse additional equity, Gonzales said, "That is something we are looking at depending on how the equity capital market performs. Nothing is definite at this point."