Citibank and Bank of Tokyo-Mitsubishi, as joint lead arrangers, have closed a Y5615bn loan for Philippine Long Distance Telephone Company (PLDT). This is for financing the purchase of equipment and supply of services in relation to, but not limited to the Data Network Expansion and Development projects and the PSTN Network Optimisation projects. There are various suppliers, to be nominated by PLDT.

The loan was oversubscribed and the amount increased from the original Y4.6mn despite very difficult market conditions caused by the war in Iraq , the downgrade of the Republic of the Philippines and continuous limited appetite in the bank market for telecom exposure.

The five-year term loan is supported by Nippon Export and Investment Insurance (Nexi) under its untied loan insurance programme.

PLDT is one of the best performing telecom companies in Asia and is 15% owned by Japan’s telecom giant NTT.

The financing not only provides very competitive terms to PLDT, but also allows PLDT to retain flexibility in the sourcing of the equipment, because of the untied nature of the credit enhancement support provided by Nexi.

It follows a similar financing worth US$100mn still guaranteed by Nexi that Citigroup joint arranged for Smart, PLDT’s mobile subsidiary, in November of 2002.

This is the first long-term debt capital rising arranged for PLDT, after the US$145mn refinancing that was arranged last year, where Citigroup was also joint lead arranger.

This loan benefits from 97.5% political risk insurance and 50% commercial risk insurance by Nexi.