Alliance Global Group Inc. and Travellers International Hotel Group Inc. of tycoon Andrew Tan plans to refinance dollar-denominated debt worth $800 million.
Alliance Global president Kingson Sian said in an interview at the sidelines of Megaworld Corp.’s P12-billion bond listing that Alliance Global would refinance $500 million in debt maturing in August while Travellers will refinance $300 million.
Sian said Alliance Global’s $500 million would be refinanced through the issuance of another dollar denominated loan of similar size and tenor, while Travellers’s $300-million debt would bne converted into peso-denominated debt, through bank loans, also of equivalent value.
“AGI has $500 million bonds maturing August and we will refinance with another dollar bond, while Travellers will go peso to refinance the $300-million bond,” Sian said.
“We are not increasing the debt. We are just replacing them,” he added.
Despite the recent depreciation of the peso against the US dollar, Sian said Alliance Global’s planned maintain its $500-million debt in dollars because of the company’s foreign currency revenues.
Travellers, meanwhile, will convert its dollar-denominated debt into peso since it is earning in the local currency.
Sian said the company opted to raise dollar denominated debts in the past given the size of funds that it wanted to raise.
But with the improved liquidity of financial institutions in the country, Sian said more companies were raising funds through the local market.
“This is a testament to the development of local financial industry. There is so much liquidity in the market right now and capacity of banks has grown in size. So now we can raise the same amount locally,” Sian said.
Meanwhile, Megaworld Corp., the real estate unit of Tan, recently raised P12 billion from the issuance of seven-year bonds.