In July 2009, Citi closed a US$75mn DFI-supported facility to support Globe Telecom’s purchase of capital equipment for its mobile telecommunications business in the Philippines.

The funds will be used to finance the improvement and expansion of Globe’s mobile network, broadband capacities, corporate data transfer services and international connectivity.

Globe Telecom is the Philippines’ second largest telecom firm, and is owned by Singapore Telecommunications and local conglomerate Ayala Corp.

The facility was split into two tranches – a US$50mn DFI tranche (financed by DEG – Deutsche Investitions- und Entwicklungsgesellschaft and The Netherlands’ FMO) with a seven-year tenor, and a US$25mn commercial bank tranche from Citi, with a five-year tenor.

Unlike traditional ECA buyer’s credits, financing for the deal was completely untied to exports, thus allowing Globe the flexibility to apply its proceeds towards capital equipment sourced both locally as well as from a variety of countries. This suited Globe’s purchasing plan, which was from a number of suppliers in smaller amounts.

Despite the slowing economy, Globe has forecast continued growth in its broadband business. This new financing paves the way for the company’s network expansion programme.

“Citi is proud to do our first DFI club financing for Globe in the Philippines. Last year, we understood Globe wanted to diversify its funding sources and see a structure that would allow them flexibility in the use of proceeds. We believe this DFI facility best suited their requirements. We are happy to have brought this timely benchmark transaction which delivered a longer-than-market tenor at an attractive all-in pricing for Globe,” says Sanjiv Vohra, Citi country officer, Philippines.
Deal information

Borrower: Globe Telecom
Amount: US$75mn (US$50mn & US$25mn)
Mandated lead arranger: Citi
Additional lending participants: DEG, FMO
Tenor: DFI loan: 7 years; Citi loan: 5 years
Date signed: July 2009