Chemical manufacturer D&L Industries Inc. said its maiden bond offering garnered strong support from fixed income investors as total bids received amounted to P13.8 billion, equivalent to more than four times the base offer size of P3 billion.
In light of the robust demand, D&L said it expects the exercise of the oversubscription option of P2 billion.
Upon full exercise of that option, the issue size will increase to P5 billion, composed of a P3-billion bond with a tenor of three years of series A bonds and a P2-billion bond with a tenor of five years of series B bonds.
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, which is equivalent to the average three-year rate in the secondary market from August 24 to 26, plus a 50 basis point 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 point 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 milestone bond offer.
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.