Company officials say that pricing will be difficult to compare with Globe's most recent deal last September when US$280 million was raised from a six-and-a-half year. This included a $145 million Finnvera tranche, a $38 million Efic tranche, a $41 million EKN tranche and a $15 million Nordic Investment Bank tranche. The Finnvera tranche paid 75bp over Libor, while the EKN tranche paid 55bp over Libor.
"This deal is not comparable with the last deal done because the political climate is different now," says a Globe Telecom official. "With the new government, the situation now is better now than it was in December, but it is yet to prove itself and deliver."
"Banks are selective at the moment," the official adds, "but good credit corporates should still have a market."
The exact amount for this new deal has not yet been determined as the contracts with suppliers Ericsson and Nokia for equipment and platform capacity have not yet been concluded.
Globe telecom has been dipping in the capital markets of late, after a reprimand from the Phillipine Department of Trade and Industry for selling more phones than their facilities and infrastructure could cope with after complaints from users. It was reported in the local newspapers that the Department agreed not to penalize the phone company and it's rival, Smart Communications Inc. after they promised to spend at least $800 million each to expand their capacity over the next 18 months.
Last month, Globe Telecom launched a corporate bond deal via HSBC for $30.7 million, setting a precedent for the domestic corporate bond market with the use, for the first time, of floating rate tranches in a non-commercial paper deal.
