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Philippine Long Distance tenders for 10 5/8% notes, solicits consents for 11 3/8% notes
New York, Oct. 6 - Philippine Long Distance Telephone Co. announced it has started a cash tender offer and consent solicitation for its $71.986 million of 10 5/8% notes due 2007 and a consent solicitation for its $250 million of 11 3/8% notes due 2012.
The Manila, Philippines-based telecom company said that since it issued the notes it has significantly deleveraged using cash flow from operations supplemented by dividends from its subsidiary Smart Communications, Inc.
As a result of improved cash flows and reduced debt levels, Philippine Long Distance restored payment of common dividends in May after suspending them in April 2001. It intends to gradually increase the dividend payout and so is seeking noteholders' approval via the two consent solicitations to give it greater flexibility to make restricted payments, including payment of dividends. The company is also offering to tighten its permitted leverage ratio to affirm its commitment to maintain leverage at "healthy levels."
In the consent solicitation for the 11 3/8% notes, Philippine Long Distance is offering a consent payment of $5.00 per $1,000 principal amount. The solicitation ends at 5 p.m. ET on Oct. 27.
The tender payment for the 10 5/8% notes is $1,097.50 per $1,000 principal amount, including a $5.00 consent payment that will only be paid to holders who tender by 5 p.m. ET on Oct. 27. The tender ends at 5 p.m. ET on Nov. 4. Philippine Long Distance will also pay accrued interest up to but excluding the payment date.
Holders of the 10 5/8% notes may deliver consents without tendering.
Credit Suisse First Boston is dealer manager and solicitation agent (852 2101-6346 (Alister Moss), 44 20 7888-6999 (Chris Tuffey) or 212 325-7596 (Andrew Karsh)). Bondholder Communications Group is information agent (212 809-2663 (Patricia Lawson) or 44 20 7236-0788). JPMorgan Chase Bank, NA is tender and tabulation agent.
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