JG Summit unit raises $750M

MANILA, Philippines - The overseas unit of taipan John Gokongwei’s investment vehicle JG Summit Holdings Inc. has raised $750 million through the sale of corporate bonds, the largest international bond issuance of a Philippine company thus far.

In a disclosure to the stock exchange, JG Summit said its wholly-owned subsidiary JGSH Philippines Ltd. offered $750-million 10-year Regulation S senior unsecured notes.

“The company has agreed to act as guarantor for the notes offering. Proceeds of the issuance will be used for the company’s general corporate purposes,” JG Summit said.

This also marks the first time in seven years that JG Summit has tapped the international debt capital markets, said deal arranger Hongkong and Shanghai Banking Corp. Ltd. (HSBC).

“The transaction is the largest Philippine corporate international bond issuance to date,” HSBC said, adding that it also secured the lowest yield ever for a 10-year dollar-denominated bond at a fixed rate of 4.375 percent per annum.

Initial price guidance was set at 4.625 percent per annum but the final rates dropped to 4.375 percent amid robust demand.

“The issue had a final order book of $6.6 billion, also the largest for a Philippine corporate to date,” HSBC said.

Early this week, JG Summit and joint bookrunners Citigroup Global Markets Ltd., Credit Suisse Securities (Europe) Ltd. and HSBC conducted a roadshow in Singapore and Hong Kong.

The bookbuilding process was participated in by 222 fixed income accounts. Of those, 91 percent were from Asia, eight percent were from Europe and one percent were offshore US accounts.

By investor type, half were distributed to fund managers, 30 percent to private banks, 14 percent to banks and six percent to insurance companies.

JG Summit, which has been using its units to raise fresh funding, had a market capitalization of $6.4 billion as of Jan. 16, 2013.

In the nine months to September last year, the investment vehicle of the Gokongwei family reported a 36.5-percent growth in net earnings to P10.76 billion, boosted by dividend income from its investment in Philippine Long Distance Telephone Co. as well as mark-to-market gains from financial assets.

JG Summit is into petrochemicals (JG Summit Petrochemicals Corp.), property (Robinsons Land Corp.), airline (Cebu Pacific operator Cebu Air Inc.), food (Universal Robina Corp.) and banking (RobinsonsBank).