Chemical firm D&L Industries Inc. on Tuesday listed its P5-billion maiden bond offering on the Philippine Dealing and Exchange Corp. (PDEx).
“Today is a significant milestone for D&L Industries—a testament to the commitment and technical expertise of dedicated workforce and fitting tribute to Five Lao Brothers who dared to dream big when they started this company in 1963 in their backyard,” company president and CEO Alvin Lao said during Tuesday’s listing ceremony conducted online.
Total bids received amounted to P13.8 billion, equivalent to more than four times the base offer size of P3 billion. As a result, the company exercised its over-allotment option of P2 billion.
About 83 percent of its P3-billion, Series A 3-year bonds were bought by corporate buyers and the rest were from individual investors. For its 5-year Series B P2-billion bond, some 85 percent of the buyers were corporates and the rest were individuals.
Interest rates were set at the tight end of the marketing range given the favorable response from investors, the company said.
The series A bonds will carry a coupon rate of 2.7885 percent per year, equivalent to the average three-year rate in the secondary market from August 24 to 26, plus a 50 basis points spread.
The series B bonds will carry a coupon rate of 3.5962 per year, equivalent to the average five-year bond from August 24 to 26, plus a 60 basis points spread.
Interest payments will be made quarterly in arrears.
D&L tapped China Bank Capital Corp. as the sole issue manager, lead underwriter and sole bookrunner of the deal.
The proceeds from the bond issuance will be used primarily to finance the company’s plant expansion in Batangas and for other working capital requirements.
Construction of the said plant started in late 2018 and commercial operations are expected to partially commence in May 2022.
Total estimated capital expenditure for the said facility amounts to approximately P8 billion, with around P3.5 billion remaining to be spent.
“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,” 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. We are looking forward to May 2022 when commercial operations finally start.”
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