MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has approved a $75-million loan by the Ayala-owned Globe Telecom, paving the way for the company’s network expansion program.
The BSP said the Monetary Board approved the loan this week where Globe would acquire three separate loans from Citibank and two European development financial institutions.
BSP Deputy Governor Diwa Guinigundo told reporters that $25 million of Globe’s loan would come from Citibank with a maturity of five years including 1.5 years of grace period.
Guinigundo said Citibank would charge interest rates based on six-month LIBOR plus 2.65 percent.
On the other hand, Guingundo said $50 million would come from the Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG), a member of Germany’s KfW Bankengruppe (KfW banking group) and the Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), the bilateral development bank of the Netherlands.
Earlier, the central bank has approved a $50-million foreign loan by the Ayala-led Globe Telecom Inc. that would finance the acquisition and installation of equipment to improve its services.
Globe had earlier planned to borrow from the Export Development Bank of Canada and this had been approved by the Monetary Board in March.
The BSP said Globe’s project was eligible for foreign financing under the digital infrastructure component of the government’s Medium Term Development Program.
The loan from EDB had a three-year maturity including a six-month grace period. It would also carry an interest rate equivalent to 300 basis-points over US 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.