Globe buys back $426 million securities

MANILA, Philippines — Telco-to-tech giant Globe Telecom Inc. has completed the buyback of its $600-million securities, purchasing 71 percent of them in line with measures to trim down debts.

In a disclosure to the Philippine Stock Exchange, Globe said it has purchased $426.42 million of securities from the total $600 million issued in 2021.

“An aggregate principal amount of $173.58 million of the securities would remain outstanding,” Globe said.

Globe priced the offer at $1,000 per $1,000 principal amount of securities and will also pay sellers an accrued distribution fee, on top of the tender amount. The telco said it would settle payments today, April 24.

Globe executed the offer as part of efforts to reduce debts, especially as the telco industry is struggling to grow in a saturated market. The securities, once bought back, may no longer be reissued or resold, so they are taken out of the telco’s debts.

“Globe is undertaking the tender offer as part of its active liability management program,” the company said.

The offer was assisted by consultancy giant Morgan Stanley, serving as dealer manager.

Globe is trying to sustain free cash flow after heavily investing during the pandemic, pairing its debt management program with reduction in capital expenditures.

For 2026, the telco plans to keep capex below $1 billion. At this level, Globe is burning capex at just 28 percent of revenue, with spending concentrated on network expansion to maintain market leadership, particularly in the mobile segment.

At the height of the pandemic in 2021, the telco turned to the foreign debt market to issue $600 million in securities with an interest rate of 4.2 percent, payable on a semi-annual basis. Proceeds were allocated primarily for capex.

Back then, Globe was spending heavily on the expansion of its network assets, as the pandemic hiked the demand for connectivity services catering to work-from-home arrangements.

Now, Globe is hitting the brakes, aiming for positive cash flow by reducing debts and regulating capex to overcome the industry trouble of a saturating market.