Globe to list fixed-rate bonds in PDEX

Manila, Philippines -  Globe Telecom has signed an agreement with the Philippine Dealing and Exchange Corp. (PDEx) to list its P4.5 billion five-year and P5.5 billion seven-year fixed rate bonds.

The retail bonds will be listed today and will begin trading in the corporate securities market of PDEx.

“We look forward to listing our latest retail bond issue with the PDEx. This will allow our investors to enjoy increased liquidity and transparency as they are able to see the best market prices,” Globe chief financial officer Alberto De Larrazabal said.

Taking advantage of the favorable interest rate environment, Globe is issuing the bonds to help fund the company’s ongoing network modernization and IT transformation program, as well as finance other capital expenditure requirements for the year.

Globe’s retail bond issue obtained a rating of PRS Aaa from Philippine Rating Services Corp. (PhilRatings), representing the highest rating available with the smallest degree of investment risk. The five-year bond, which has a term of five years and three months from issue date, and the seven-year bond have coupon rates of 5.75 percent and six percent, respectively.

Globe ended the first quarter of 2012 with conservative gearing ratios with gross debt-to-equity ratio at 1.09:1 and gross debt-to-EBITDA ratio at 1.48:1, well within its debt covenants of 2:1 and 3:1, respectively. Consolidated service revenues for the period surged to an all-time high of P20.2 billion with broad-based growth, while core net income stood at P2.7 billion, seven percent below last year’s P2.96 billion.

Consolidated reported net income, however, declined 10 percent for the first quarter to P2.7 billion from P3 billion in the same period last year.

Company officials said this is partly due to continued investments in subscriber acquisitions and network and IT infrastructure to enhance overall customer experience.

First quarter consolidated service revenues rose to an all-time high of P20.2 billion, six percent higher than last year’s level of P19.1 billion following the sustained strong performance of the company’s mobile, broadband and fixed line data segments.

Mobile revenues increased six percent despite a very challenging market underscored by subscribers’ continued preference for value offers, intense competition, and increased multi-SIM incidence.

Broadband and fixed line data revenues were also up 13 percent and five percent, respectively, driven by an expanded subscriber base and the sustained demand for data services from the corporate sector.

Globe has earmarked about $750-800 million in capital expenditures for 2012. This includes $530 million for transformation initiatives and $220-270 million for business-as-usual investments for the company’s fixed line data network, submarine cable facilities, IT infrastructure, as well other selling and general capital expenditures.

As of end-March, Globe has a total of 12,714 base stations and 7,060 cell sites to support its 2G, 3G, 4G and WiMax services.

Cumulative mobile subscriber base as of end-March stood at over 31 million, up 14 percent from the same period last year.