Del Monte Philippines successfully completes its maiden bond offering

Del Monte Philippines successfully completes its maiden bond offering 1

SINGAPORE: Tapping  the  Philippine  debt  capital  markets  for  the  first  time,  Del Monte Philippines Inc (DMPI) has  successfully  raised P6.47 billion worth of fixed-rate bonds.

Del Monte Philippines Inc (DMPI) intends to list the bonds in the Philippine Dealing & Exchange Corporation on 30 October 2020.

“The  success  of  the  bond  offering  reflects  the  investing  public’s  confidence  and  optimism  in DMPI’s  strong  fundamentals  and  long-term  prospects as  well  as  the  company’s  financial strength and capability to meet our financial obligations,” said Joselito D Campos, Jr, CEO of Del Monte Pacific Ltd and DMPI.

The issuance, which consists of three-year bonds with an interest rate of 3.484 percent and five-year  bonds  with  an  interest  rate  of  3.7563  percent,  was  1.29x  oversubscribed.  It  was  well-received by a good mix of retail and institutional investors that include insurance companies, retirement funds and asset management groups, among others.

PhilRatings assigned the DMPI bonds with its highest Issue Credit Rating of PRS Aaa, with a Stable Outlook. Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.

While various businesses  have  been  affected  by  the coronavirus  outbreak  and  the  prevailing community quarantine, Filipino families continue to spend a significant amount of their income on  food. 

PhilRatings  noted  that  opportunities  remain  for  food  and  beverage  companies  like DMPI as their product offerings are classified as basic and essential goods.  Proceeds  from this  issuance  will  be  used  to refinance  and term  out  existing  short-term  loans and convert them into long-term liabilities.

BDO  Capital  and  Investment  Corporation,  China  Bank Capital  Corporation,  First  Metro Investment  Corporation  and  RCBC  Capital  Corporation  were  the  mandated  joint  issue managers,  joint  lead  underwriters  and  joint  bookrunners  for  the  maiden  bond  issuance. Exchange Equity Partners acted as financial adviser to DMPI.

DMPI has been operating in the Philippines for 94 years and is the reigning market leader in canned  pineapple  and  mixed  fruit,  canned  and  tetra ready-to-drink  juices,  tomato  sauce  and spaghetti sauce categories, under its iconic Del Monte brand. DMPI is one of the largest food and beverage companies in the Philippines operating an integrated 26,000-hectare pineapple plantation in Bukidnon, one of the largest in the world.

DMPI generated sales of P7.4 billion in the first quarter ending July 2020 with domestic sales comprising about two-thirds and the balance from the international market. 

With local benchmark interest rates approaching historic lows and the current system liquidity nearly reaching twice the level in 2019, DMPI saw an opportunity to lower borrowing costs while lengthening debt maturity profile.

www.delmontepacific.com

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