BSP approves $50-million Globe Telecom loan

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has approved a $50-million foreign loan by the Ayala-led Globe Telecom Inc. to finance the acquisition and installation of equipment to improve its services.

Sources said Globe plans to borrow from the Export Development Bank of Canada and this has been approved by the Monetary Board.

The source said Globe’s project is eligible for foreign financing under the digital infrastructure component of the government’s Medium Term Development Program.

The loan, according to the source, has a three-year maturity including a six-month grace period. It will carry an interest rate equivalent to 300 basis-points over dollar LIBOR.

Globe Telecom, the Philippines’ second-largest phone firm, earlier said it was also planning to issue P3 billion ($64 million) worth of three- and five-year bonds to raise funds for its operations.

The February 2012 bonds would carry a coupon rate of 7.5 percent, payable quarterly, while the February 2014 bonds would have a coupon of eight percent, Globe said in a statement to the Philippine Stock Exchange.

Globe is owned by Singapore Telecommunications and local conglomerate Ayala Corp.

The telecoms firm, which posted a 15-percent drop in 2008 net income, had earmarked lower capital spending in 2009 which would drop by 16 percent from the 2008 level.

The company, however, still forecast continued growth in its broadband business despite the slowing economy.