Converge prices P10-B maiden bond offering

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Fiber broadband operator Converge ICT Solutions Inc. has received the Certificate of Permit to Offer Securities for Sale from the Securities and Exchange Commission (SEC) for the first P10-billion peso-denominated fixed-rate bonds under the company’s P20-billion shelf registration program.

Converge disclosed that it received the certificate Certificate of Permit on Monday, March 28, for its P5-billion maiden bond offering on the base tranche with an oversubscription option of up to P5 billion. The offer period is March 28 to April 1, 2022.

The bonds have been priced at 50bps over Philippine 5 Year BVAL rates, at the tight end of the marketed 50-100bps range, resulting in a total of c. 5.59 percent for the bond offering.

Converge tapped the bond market to fund the nationwide expansion of its digital infrastructure, according to President and Co-Founder Grace Y. Uy.

The proceeds of the bond issue will be used for capital expenditures related to expanding its fiber network to new markets in Visayas and Mindanao.

The company appointed BDO Capital & Investment Corporation as Issue Manager and BDO Capital & Investment Corporation and BPI Capital Corporation as Joint Lead Underwriters.

The first tranche bonds received the top-notch issue credit rating of “PRS Aaa”, with a Stable Outlook, from the Philippine Ratings Services Corporation.

Converge is expected to spend around P26-28 billion in total capital expenditures in 2022 for the completion of its terrestrial backbone and further expansion of its distribution network throughout the country.

In the recent 2021 full year performance briefing, Converge reported it has maintained its industry-leading trifecta of 69.2percent year-on-year revenue growth, 55.9 percent EBITDA margin, and 20.9 percent return on invested capital (ROIC).

The fiber internet provider also doubled its net income to P7.2 billion in 2021 from P3.4 billion the previous year, growing by 111 percent on the back of record number of port rollouts, continued strong expansion of its residential subscriber base, and recovery of the enterprise business.

As of end 2021, the Converge fiber backbone reached 103,000 kilometers, passing through 495 cities and municipalities across the country, with 1.7 million total residential subscribers.

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Credit belongs to : www.mb.com.ph

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