“Globe Telecom, Inc. (Globe) is increasing the amount of its bonds from P2.7 billion to P3.0 billion. Even with the increase in amount, the bonds are still rated PRS Aaa,†PhilRatings announced. A rating of PRS Aaa is defined as: “…the issue has the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secured. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.â€
Globe initially came for a credit rating for P2.7 billion in bonds in September 2003. The issue has since been upsized to P3 billion, with the volume and pricing indicated as follows:
| Volume (PHP) | Spread | |
| 3-year Floating | 256,550,000 | 3m Mart1 +1% p.a. |
| 5-year and One Day Floating | 743,450,000 | 3m Mart1 + 1.375% p.a. |
| 5-year and One Day Fixed | 2,000,000,000 | Fixed interest rate equivalent to 5yr Mart1 plus a spread |
| Total Issue Size | 3,000,000,000 |
Globe continues to maintain its strong position in a fast-growing cellular market. As of year-end 2003, total subscribers numbered about 8.9 million, up by 35% from 2002’s 6.6 million. In the year 2004, about USD 350 million will be earmarked for capital expenditures, with a focus on increasing coverage.
Gains in increasing its subscriber base are likewise reflected in the company’s financial performance. Net Service Revenues in 2003, amounting to P47.5 billion, represented a 20% increase from 2002’s P39.8 billion. Net income likewise improved by a hefty 50% to P10.3 billion in 2003. As of year-end December 2003, cash balance amounted to P15.0 billion, inclusive of short-term investments. Free cash flow amounted to P13.3 billion in 2003.
Going forward, the company is expected to enjoy ample financial flexibility given its strong ability to generate cash internally and its favorable debt profile, where maturities are well-spread over the next five years.