Food ingredients and plastics maker D&L Industries Inc. said Friday its maiden bond sale received strong interest from investors, as the offering was almost five-times oversubscribed.
D&L said in a disclosure to the stock exchange the order book reached P13.8 billion, equivalent to 4.6 times the base offer size of P3 billion.
Given the strong demand, the company would likely exercise of the oversubscription option for another P2 billion. Upon full exercise of the option, the issue size will increase to P5 billion, composed of P3-billion bond with a tenor of 3 years and P2 billion with a tenor of 5 years.
“We are overwhelmed with the strong support the fixed income community has shown us in our debut bond issuance. This has allowed us to price our bonds at among the lowest rates in Philippine corporate bond history,” D&L president and chief executive Alvin Lao said.
“This maiden offering will be a useful financial exercise for the company and will allow us to fully fund our Batangas expansion, which will be the next leg of growth for the company,” he said.
Interest rates were set at the tight end of the marketing range, given the favorable response from investors.
The three-year bonds will carry a coupon rate of 2.7885 percent per annum, while the five-year bonds will carry a coupon rate of 3.5962 percent.
Philippine Rating Services Corp. rated the bonds ‘PRS Aaa’ with stable sutlook, the highest rating assigned by the agency.
The company hired China Bank Capital Corp. as the sole issue manager, lead underwriter, and sole bookrunner of the milestone bond offer.
The proceeds from the bond issuance will be used primarily to finance the P8-billion expansion plan in Batangas province. The construction of its plant in Batangas started in late 2018 and commercial operations were expected to partially commence by May 2022. The company spent P4.5 billion for the completion of the facility.
D&L reported a net income of P1.39 billion in the first half, up 74 percent from the same period last year.