ABS-CBN refinances debt

MANILA, Philippines - Broadcast giant ABS-CBN Corp. is set to refinance its P1.65 billion debt after completing its fund raising activity to finance its capital expenditure program this year.

ABS-CBN chief information officer Eulogio Martin Masilungan said in a disclosure to the Philippine Stock Exchange (PSE) that the company’s Board of Directors approved the refinancing of the debt with Security Bank Corp. last Jan. 30.

“The Board of Directors of ABS-CBN authorized the refinancing of the company’s outstanding obligations under its existing P1.65 billion loan with Security Bank through a four-year term to be arranged by SB Capital Investment Corp.,” Masilungan said.

ABS-CBN earlier raised P6 billion from the sale of fixed rate bonds as investors gobbled up the seven-year retail bonds issued by the broadcasting firm.

The company initially decided to issue P5 billion in the first tranche but decided to issue another P1 billion after exercising its over allotment option.

It would be recalled that the Securities and Exchange Commission (SEC) gave the company the green light to issue up to P10 billion fixed rate bonds in one or two tranches.

BDO Capital and Investment Corp., BPI Capital Corp., and HSBC acted as joint lead managers for the transaction.

Proceeds from the fund raising activity would be used to finance its capital expenditure program over the next few years.

ABS-CBN intends to invest in forward planning for its production process, which includes the construction of sound stages. The planned sound stages will deliver improvements to operations by increasing production quality and reducing costs associated with on-location shoots.

Currently, the majority of ABS-CBN’s filming is done on-location. The company will also use part of the proceeds for the roll out of digital terrestrial TV and the expansion of its pay-TV business through Sky Cable.