Globe Telecom Raises P25 Billion via Preferred Shares Offering

Why It Matters

The capital raise strengthens Globe’s balance sheet, reduces foreign‑currency debt, and finances growth in a competitive telecom market.

Key Takeaways

• Globe raised PHP 25 billion via preferred shares
• Offering oversubscribed 2.4 times, base PHP 15 billion
• Dividend rates set at 6.12% and 6.76%
• Proceeds to redeem US‑dollar securities, fund capex
• Additional 5 million shares exercised via oversubscription option

Pulse Analysis

Globe Telecom’s PHP 25 billion preferred‑share issuance underscores the growing appeal of perpetual preferred equity in emerging markets. Unlike traditional debt, these non‑voting instruments provide investors with a fixed dividend while offering issuers flexibility to manage capital structure without immediate repayment obligations. The 2.4‑times oversubscription reflects robust investor confidence in Globe’s credit profile and its strategic focus on expanding high‑speed connectivity across the Philippines.

By allocating the proceeds to retire US‑dollar perpetual capital securities, Globe reduces its foreign‑currency exposure and improves debt‑to‑equity ratios, a prudent move amid volatile global interest rates. The remaining funds will accelerate network upgrades, including 5G rollout and fiber‑optic expansion, positioning the telco to capture rising data demand and compete with regional rivals. This capital efficiency aligns with Globe’s broader objective of enhancing customer experience while maintaining dividend attractiveness for income‑focused investors.

The transaction also signals a broader trend in the Philippine capital markets, where telecom operators are turning to hybrid financing to fund digital transformation. Globe’s successful offering may encourage peers to explore similar structures, fostering deeper market liquidity and diversified funding sources. For analysts, the elevated dividend yields—6.12% for five‑year Series A and 6.76% for ten‑year Series B—provide a compelling yield premium in a low‑interest‑rate environment, reinforcing Globe’s stature as a stable, dividend‑generating asset.

Deal Summary

Ayala‑led Globe Telecom Inc. completed an oversubscribed non‑voting perpetual preferred shares offering, raising P25 billion. The company issued 12.5 million shares at P2,000 each, 2.4 times oversubscribed, and will use proceeds to redeem US‑dollar perpetual capital securities and fund network and digital infrastructure investments.