Major Transactions


Equities Market

Debt Capital Market

Formula for Success
 

  Track Record in Equities Market  
   
A. List of IPOs, Secondary Offerings, Rights Issues and M& A Transactions for the Period October 1, 2006 to September 30, 2007
   
1. PNOC Energy Development Corporation (“PNOC EDC”)
    • Php19.2 billion IPO
    • Issue date: December 2006
    • BDO Capital acted as Joint Issue Manager and Domestic Lead Underwriter.
    • Benefit to client: Proceeds from the offer will be used to finance the company’s working capital requirements including the repayment of debts, development of steamfields (the company is thea global leader in geothermal energy) and purchase of new drilling rig. The Philippine National Oil Company, a major shareholder in the company sold a portion of its ownership to the public in line with the privatization efforts of the Philippine government. The issue was oversubscribed both internationally and locally.
    • Client contact: Mr. Paul Aquino, President/CEO, Tel: 632 893-6001 to 47, email: aquino.pa@energy.com.ph
       
2. • Chemrez Technologies, Inc.
    • Php1.5 billion Follow-On Offering
    • Issue date: December 2006
    • BDO Capital acted as Underwriter.
    • Benefit to client: Proceeds from the offer will be used to finance the purchase of biodiesel plant, working capital for biodiesel production, and retirement of bank debt. This is in line with the government’s efforts to promote a “cleaner and greener” environment. The issue was oversubscribed.
    • Client contact: Mr. Francis Caluag/Chief Financial Officer, Tel: 632 635-0680
       
3. • Aboitiz Equity Ventures Inc.
    • Php1.5 billion Preferred Shares Issue
    • Issue date: December 2006
    • BDO Capital acted as Underwriter
    • Benefit to client: Proceeds from the issue were used to refinance a portion of its outstanding preferred shares, as well as the various power projects of the company, its subsidiaries and affiliates.
    • Client contact: Mr. Gabby Manalac, Treasurer, Tel: 632 816-2881, email: gmanalac@aboitiz.com
       
4. Megaworld Corporation (“Megaworld”)
    • Php10.8 billion Stock Rights Offering
    • Issue date: January 2007
    • BDO Capital acted as Financial Advisor/Issue Manager and Bookrunner (There was no investment house that acted as underwriter. Aside from its official role as Financial Advisor, BDO Capital effectively acted as Issue Manager and Bookrunner to the transaction.)
    • Benefit to client: Proceeds from the Rights Offer will be used for the development and construction of City Place Hotel, BPO office buildings and retail components in Binondo; expansion of Eastwood BPO office; purchase of prime and strategic properties for landbanking purposes; and for working capital requirement of the residential condominium developments in Forbes Town Center and McKinley Hill located at Bonifacio Global City, Taguig City.
    • Aside from being oversubscribed, the deal was the most widely participated rights offering in the recent history of the Philippine Stock Exchange.
    • Client contact: Mr. Kingson Sian, Senior Vice President, Tel: 632 867-8048, email: kingson@vasia.com
       
5. Filinvest Land Corp.
    • Php8.6 billion Primary and Secondary Offering of Common Shares (Follow-On Offering)
    • Issue date: February 2007
    • BDO Capital acted as Underwriter.
    • Benefit to client: Proceeds from the offer were used to finance the company's planned expenditures in 2007.
    • Client contact: Ms. Josephine G. Yap, Exec. Vice President, Tel: 727-0431 to 39
       
6. Alliance Global Group, Inc. (“AGI”)
    • Php3.3 billion Stock Rights Offering
    • Issue date: March 2007
    • BDO Capital acted as Financial Advisor/Issue Manager and Bookrunner (There was no investment house that acted as underwriter. Aside from its official role as Financial Advisor, BDO Capital effectively acted as Issue Manager and Bookrunner to the transaction.)
    • Benefit to client: Proceeds from the Rights Offering will be used to finance expansion and enhancement of the company's businesses.
    • Client contact: Ms. Dina D. Inting, First Vice President-Finance, Tel: 632 911-2949, email: dina_inting@allianceglobal.biz
       
       
7. Rizal Commercial Banking Corporation ("RCBC")
    • Php4.9 billion Primary and Secondary Offering of Common Shares (Follow-On Offering)
    • Issue date: March 2007
    • BDO Capital acted as Underwriter.
    • Benefit to client: Proceeds from the offer will be used to strengthen the bank's capital adequacy ratio, expand branch network and fund technology initiatives and other similar corporate purposes.
    • Client contact: Mr. Lorenzo V. Tan, CEO, Tel: 632 894-9000
       
8. EEI Corporation
    • Php540 million Stock Rights Offering
    • Issue date: March 2007
    • BDO Capital acted as Underwriter
    • Benefit to client: Proceeds from the offer were used to retire bank debt and fund working capital for on-going projects.
    • Client contact: Mr. Gaudencio S. Hernandez, Jr., Senior Vice President and CFO, Tel: 632 635-0863
       
9. Pacific Online Systems Corporation ("POSC")
    • Php353.4 million IPO
    • Issue date: April 2007
    • BDO Capital acted as Issue Manager and Lead Underwriter.
    • Benefit to client: Proceeds from the primary offer will be used to finance the company's capital expenditures, working capital requirements and other general corporate purposes. The issue was 7x oversubscribed, with market closing price gaining more than 50% from its IPO price on listing date.
    • Client contact: Mr. Willie N. Ocier, Chairman and President, Tel: 632 636-5281
       
10. National Reinsurance Corporation of the Philippines ("NCRP")
    • Php2.8 billion IPO
    • Issue date: April 2007
    • BDO Capital acted as Issue Manager and Joint Lead Underwriter. In addition, BDO Capital also acted as Receiving Agent and Receiving Bank for the transaction.
    • Benefit to client: Proceeds from the offer will be used to increase the company's paid-up capital which will enable the company to increase its capacity to obtain an acceptable rating as a reinsurer, an essential prerequisite to gaining entry into significant Asian reinsurance markets. The issue was the most widely distributed IPO in the recent history of the PSE (12x oversubscription) generating individual orders from more than 11,000 local small investors (with maximum investment of Php25,000.00 per individual).
    • Client contact: Mr. Wilfrido C. Bantayan, President/CEO, Tel: 632 759-5801 to 06
       
11. Union Bank of the Philippines
    • Php4.6 billion Primary Offering of Common Shares (Follow-On Offering)
    • Issue date: May 2007
    • BDO Capital acted as Participating Domestic Sub-Underwriter.
    • Benefit to client: Proceeds from the offer will be used to strengthen the bank's capital adequacy ratio and thereby enhancing further its financial flexibility.
    • Client contact: Mr. Victor B. Valdepenas, President and COO, Tel: 632 892-0011
       
12. Alliance Global Group, Inc.
    • Php18.0 billion Primary and Secondary Offering of Common Shares (Follow-On Offering)
    • Issue date: June 2007
    • BDO Capital acted as Issue Manager and Domestic Lead Underwriter.
    • Benefit to client: Proceeds from the offer will be used to mainly to finance the acquisition of an alcohol distillery, construction of new alcohol distillery, and expansion of alcoholic beverage production.
    • AGI's follow-on offering was among the largest follow-on offerings in the recent history of the PSE.
    • Client contact: Mr. Kingson Sian, President, Tel: 632 867-8048, email: kingson@vasia.com
     
13. Aboitiz Power Corporation
    • Php10.0 billion Initial Public Offering of Common Shares
    • Issue date: July 2007
    • BDO Capital acted as Domestic Lead Underwriter.
    • Benefit to client: Proceeds from the offer will be used for improvements to its existing power generation and distribution facilities, investments in capacity expansion and development of Greenfield projects.
    • Client contact: Mr. Gabby Manalac, Treasurer, Tel: 632 816-2881,
email: gmanalac@aboitiz.com
       
14. Phoenix Petroleum Philippines, Inc.
    • Php355.25 million Initial Public Offering of Common Shares
    • Issue date: July 2007
    • BDO Capital acted as Issue Manager and Sole Underwriter.
    • Benefit to client: Proceeds from the offer will be used primarily to finance capital expenditures and working capital.
    • Client contact: Mr. Dennis A. Uy, President, Tel: 63 82 235 8888
       
15. Vista Land & Lifescapes, Inc.
    • Php21.2 billion Primary and Secondary Offering of Common Shares (Follow-On Offering)
    • Issue date: July 2007
    • BDO Capital acted as Issue Manager and Domestic Lead Underwriter.
    • Benefit to client: Proceeds from the offer will be used to finance capital expenditures, settle loans payable and fund operating working capital.
    • Client contact: Ms. Benjamarie Therese N. Serrano, President and CEO, Tel: 632 889 4690; e-mail: jing@brittany.com.ph
       
16. Anchor Land Holdings, Inc.
    • Php770.0 million Initial Public Offering of Common Shares
    • Issue date: August 2007
    • BDO Capital acted as Issue Manager and Sole Underwriter.
    • Benefit to client: Proceeds from the offer will be used to finance land banking initiatives, seed fund to jump start its residential condominium project in Paraρaque City (Metro Manila) and working capital for Mayfair Tower (one of the issuer's condominium projects).
    • Client contact: Mr. Stephen Lee, Chairman, Tel: 632 888-6688;
e-mail: stephen@anchorlandholdings.com
       
17. GMA Network, Inc.
    • Php7.76 billion Initial Public Offering of Common Shares and Offer of Philippine Depositary Receipts
    • Issue date: August 2007
    • BDO Capital acted as Participating Underwriter.
    • Benefit to client: Proceeds from the offer will be used for improvements to existing facilities, investments in capital expansion and general working capital requirements.
    • Client contact: Mr. Felipe Gozon, Tel: 632 928-7777
       
18. SM Investments Corporation
    • Php4.5 billion 5-Year Redeemable Preferred Shares Issue
    • Issue date: August 2007
    • BDO Capital acted as Joint Issue Manager and Bookrunner
    • Benefit to client: Proceeds from the issue will be used to finance working capital expenditures.
    • Client contact: Mr. Jose Sio, Group CFO/Executive Vice President, Tel: 632 833-8120, email: jtsio@info.com.ph
       
 		 19. Acquisition of the Philippine banking and credit card business of American Express Bank Ltd. by Banco de Oro - EPCI, Inc.
    • BDO Capital acted as Advisor to BDO-EPCI
    • Documents signed in August 2007; financial closing expected 3 months thereafter.
    • The acquisition will consolidate and cement the merged bank's (BDO-EPCI) foothold in the credit card business and enhance its reach in private banking.
    • Client contact: Mr. Nestor V. Tan, President/BDO-EPCI, Tel: 632 688-1288, email: nvtbdo@bdo.com.ph
       
       
B. Largest and Most Significant Transactions and their Relevance to the Market and its Development
       
  1. PNOC Energy Development Corporation Php19.2 billion IPO.  BDO Capital acted as Joint Issue Manager and Domestic Lead Underwriter. The PNOC EDC IPO is one of the largest IPOs in the recent history of the PSE generating substantial interest from both the international and local investors. The issue was 4x oversubscribed. The Philippine National Oil Company, a major shareholder in the company sold a portion of its ownership to the public in line with the privatization efforts of the Philippine government. This is a landmark transaction for the national government as this was the first privatization done in the last decade. Moreover, the strong investor support to the IPO is a testimony to the renewed trust and confidence of the international, as well as local investing community in the Philippines as a whole. On listing date, market price increased by more than 30% from its IPO price.
       
  2. Vista Land & Lifescapes, Inc.'s Php21.2 billion Follow-On Offer. BDO Capital acted as Issue Manager and Domestic Lead Underwriter. The offering is touted as the largest follow-on offer in the history of the PSE. Fresh from a corporate restructuring, Vista Land was listed on the PSE by way of introduction on June 2007. C&P Homes was subsequently delisted on the PSE. Shares from the follow-on offering were successfully listed on the PSE on July 2007 despite competing issues in the market at that time. Majority of the purchasers of the shares comprised foreign investors, a manifestation of renewed confidence of the international community not only in the Philippine property market but in the Philippine economy in general.
       
  3. Alliance Global Group, Inc.'s Php18.0 billion Follow-On Offer. BDO Capital acted as Issue Manager and Domestic Lead Underwriter. The issue is one of the two largest follow-on offerings in the PSE history (Vista Land being the largest). The offer was well received in both the local and international markets with an over-subscription rate of 1.8x and 4.8x, respectively. From an illiquid stock with hardly any trading history to boast of, AGI was successfully listed on the PSE in June 2007 with market price gaining more than 10% from its offer price upon listing.
       
  4. Megaworld Corporation's Php10.8 billion Rights Offer.  BDO Capital acted as Financial Advisor. In addition, since no local investment house underwrote the issue, BDO Capital effectively acted as Issue Manager and Bookrunner for the transaction. The rights issue is the most widely participated rights offering in the recent history of the PSE. It would be worthwhile to note that the rights shares allotted to foreign shareholders were fully taken up, with an additional 6% over-subscription. As foreign shareholdings in Megaworld are nearing the 40% maximum constitutional limit, the company has to reject the over-purchase applied for by foreign stakeholders. This is an indication that foreign investors have started to put more value to the Philippine property market, and in the Philippine economy, in general. As an index stock, improvements in share price of Megaworld will help lift the Philippine stock index, a bellwether of Philippine economic performance.
       
  5. Alliance Global Group, Inc.'s Php3.3 billion Rights Offer.  BDO Capital acted as Financial Advisor. Similar to the Megaworld transaction, BDO Capital effectively acted as Issue Manager and Bookrunner for the transaction as no local investment house acted as underwriter. This transaction is a prelude to AGI's larger equity fund-raising exercise (follow-on offering as described above). Pre-rights offering, there is hardly no trade activity on AGI shares. Proceeds on the rights offer were used by AGI to acquire additional business interest thereby adding more value to the company and renewing investor interest in the stock.
       
  6. National Reinsurance Corporation of the Philippines' PhP2.8 billion IPO.  BDO Capital acted as Issue Manager and Joint Lead Underwriter. This is considered a "test case" in the Philippine stock market, being the first reinsurance company to be listed on the PSE. And in the market where knowledge on the reinsurance industry is limited to corporates, the IPO was well received by retail investors generating individual orders from more than 11,000 local small investors ("LSI") (or those with maximum investment amount of Php25,000.00). This is the first time since the LSI provision was implemented when the 10% maximum allocation for LSI was almost reached (at 9% with cutbacks applied during the middle of the public offer period). The issue is one of the most widely distributed IPOs in the recent history of the PSE, which was oversubscribed by around 12x. Market price on opening day went up by more than 25% from its IPO price. Unlike other IPOs which have foreign component to back up the offering in case of lackluster performance in the local market, this IPO is purely domestic, a clear testimony to the renewed trust and confidence by local investors in the Philippine economy. In addition, as the Philippine Stock Exchange requires lodgement of the shares into the book-entry system of the Philippine Depository and Trust Corporation (as certificated shares are no longer allowed prior to listing), this had helped brokerage houses to generate substantial business.
       
  7. Pacific Online Systems Corporation's P353.4 million IPO.  BDO Capital acted as Issue Manager and Underwriter. Although a small IPO issue, POSC's IPO has generated substantial interest from the investing public with the issue oversubscribed 7x. POSC is the first on-line gaming company to be listed on the PSE. IPO proceeds will be used to finance capital expenditures, working capital requirements, and other general corporate purposes. On POSC's listing on the PSE, share price hit its ceiling, gaining 50% from its IPO price. The successful outcome of the IPO will help the Philippine Charity Sweepstakes Office (the principal government agency that regulates the Philippine lottery sector) continue its charity projects as 30% of the total funds raised from the on-line lottery are geared towards this purpose.
       
  8. Phoenix Petroleum Philippines, Inc.'s P355.25 million IPO.  BDO Capital acted as Issue Manager and Sole Underwriter. The deal was relatively small but carries with it many "firsts" in the Philippine equities market. The company is the first non-Luzon based company to list on the PSE. Located in Davao City in the Mindanao island, southern Philippines, Phoenix is also the first small independent petroleum distributor to list on the PSE. The issue was well received in the market oversubscribed by more than 15x. More than 7,000 local small investors submitted their applications to subscribe prompting BDO Capital to ballot the shares as prescribed by the PSE rules. This was the first time that balloting was done since the PSE implemented the rule on LSI distribution. Subsequently, only 2,000 subscribers were awarded of the shares. On listing date, market price of the stock rose more than 40%.
       
  For the rest of 2007, BDO Capital has a healthy pipeline of upcoming equity issues where it will have major roles (issue manager and lead underwriter). BDO Capital is currently mandated as lead underwriter for several announced IPOs and follow-on offerings of Pepsi Cola Products Philippines Inc., Intelligent Wave Philippines and Basic Energy Corporation.
       
       
C. League Table Position
       
Issuer Issue Size BDO Capital’s Role
Vista Land & Lifescapes, Inc. Php21.2 billion Follow-On Offer Issue Manager and Domestic Lead Underwriter
Alliance Global Group, Inc. Php18.0 billion Follow-On Offer Issue Manager and Domestic Lead Underwriter
PNOC-Energy Development Corp. Php19.2 billion IPO Issue Manager and Domestic Lead Underwriter
Aboitiz Power Corporation Php10.0 billion IPO Joint Lead Underwriter
National Reinsurance Corporation of the Philippines Php2.8 billion IPO Issue Manager and Joint Lead Underwriter
Anchor Land Holdings, Inc. Php770.0 million IPO Issue Manager and Sole Underwriter
Phoenix Petroleum Philippines, Inc. Php355.25 million IPO Issue Manager and Sole Underwriter
Pacific Online Systems Corp. Php353.4 million IPO Issue Manager and Lead Underwriter
 
       
     
       
  Track Record in the Debt Capital Market
       
1. Globe Telecom Inc.
    • Php2.8 billion 5-Year Floating-Rate Corporate Notes.
    • Issue date: October 2006
    • BDO Capital acted as Joint Issue Manager and Underwriter.
    • Benefit to client: The funds were used to finance capital projects and other general corporate purposes.
    • Client contact: Mr. Alberto M. De Larrazabal, VP-Head of Treasury, Tel: 632 730-2742, email: amdelarrazabal@globetel.com.ph
       
2. Banco de Oro Universal Bank
    • Long-Term Negotiable Certificates of Deposits Series 3
    • Issue size of Php5.0 billion
    • Issue date: October 2006
    • BDO Capital acted as Selling Agent
    • Benefit to client: This is the 3rd tranche LTNCD issued by BDO. As there is limited long term funding in the country, the issue helps the bank raise term funding to finance its growing mortgage portfolio.
    • Client contact: Mr. Pedro Florescio, Treasurer/Executive Vice President, Tel: 632 687-2937, email: pmf@bdo.com.ph
       
3. Manila North Tollways Corporation
    • Php5.5 billion 7-Year Fixed-Rate Corporate Notes
    • Issue date: November 2006
    • BDO Capital acted as Joint Bookrunner and Lead Manager.
    • Benefit to client: The funds were used to partially redenominate MNTC's US$-denominated project finance loans into local currency, effectively reducing the company's vulnerability to foreign exchange fluctuations. MNTC is the largest private toll concessionaire in the Philippines with concession rights covering the largest expressway in the country, the North Luzon Expressway.
    • Client contact: Mr. Rodrigo E. Franco, EVP, CEO and CFO, Tel: 632 633-3519, email: refranco@mntc.com
       
4. KSA Realty Corporation
    • Php1.7 billion 7-Year Term Loan Facility
    • Issue date: November 2006
    • BDO Capital acted as Sole Arranger.
    • Benefit to client: The funds were used to redeem preferred shares and to refinance existing loan obligations.
    • Client contact: Mr. Vince Formoso, Vice President-Treasury, Tel: 632 638-2101/633-7851
       
5. South Luzon Tollway Corporation
    • Php3.1 billion 10-Year Syndicated Term Loan
    • Issue date: December 2006
    • BDO Capital acted as Lead Arranger.
    • Benefit to client: The funds will be used to partially finance the full rehabilitation and upgrade of the South Luzon Expressway. This is the first 10-year project finance loan funded by all-local banks.
    • Client contact: Ms. June Salwah Hassan, Finance Department Head, Tel: 632 751-0371/894-0025, email: june.hassan@mtdsltc.com
       
6. Manila Electric Company (entry for Best Deal Award)
    • Php12.0 billion 7-Year Fixed and Floating-Rate Corporate Notes
    • Issue date: December 2006
    • BDO Capital acted as Financial Advisor, Joint Issue Manager and Underwriter.
    • Benefit to client: The funds were used to refinance existing debt obligations previously secured by mortgage trust indenture. This note facility will be secured by a negative pledge on certain assets of the company. This is a landmark transaction in the Philippine debt capital market as the deal is the largest privately placed debt transaction funded by all-local banks. The deal was completed in less than two months.
    • Client contact: Rafael Andrada, Treasurer, Tel: 632 631-5598,
email: randrada@meralco.com.ph
       
7. Aboitiz Equity Ventures Inc.
    • Php1.5 billion Preferred Shares Issue
    • Issue date: December 2006
    • BDO Capital acted as Underwriter
    • Benefit to client: Proceeds from the issue were used to refinance a portion of its outstanding preferred shares, as well as the various power projects of the company, its subsidiaries and affiliates.
    • Client contact: Mr. Gabby Manalac, Treasurer, Tel: 632 816-2881,
email: gmanalac@aboitiz.com
       
8. San Carlos Bioenergy, Inc.
    • Php1.778 billion 12-Year Syndicated Term Loan
    • Issue date: December 2006
    • BDO Capital acted as Co-Arranger.
    • Benefit to client: The funds will be used to construct a co-generation and ethanol plant in San Carlos City, Negros Occidental
    • Client contact: Mr. Luis O. Villabrille, President, Tel: 632 752-0050
       
9. Republic of the Philippines
    • 5-Year Retail Treasury Bonds
    • Issue size of Php7.7 billion
    • Issue date: December 2006
    • BDO Capital acted as Selling Agent
    • Benefit to client: The deal was oversubscribed but capped. It is significant as these bonds allow small investors with a minimum of Php5,000.00 only to invest in government securities. BDO Capital has been involved in all the retail securities issuances of the government over the last few years.
    • Client contact: Mr. Eduardo Mendiola, Deputy Treasurer of the Philippines, Tel: 632 527-3183, Fax: 632 527-3183
       
10. DMCI-MPIC Water Company, Inc.
    • US$240.0 million Acquisition Facility
    • Financial close: January 2007
    • BDO Capital acted as Debt Advisor and Sole Arranger
    • Benefit to client: Proceeds were used to acquire the Maynilad Water Services, Inc. ("MWSI"), one of the country's two largest water concessionaires that services the greater Manila area and neighboring provinces. The government bidded out and privatized the water concession of MWSI. BDO Capital advised and raised US$240.0 million for the winning bidder, DM Consunji Holdings Incorporated-Metro Pacific Investments Corporation ("DMCI-MPIC") Water Company.
    • Client contact: Mr. Randy Estrellado, Chief Finance Officer; Tel: 632 888-0802; e-mail: rtestrellado@metropacific.com
       
11. FP Capital Limited
    • 5-Year Revolving Credit Facility Guaranteed by First Pacific Company Ltd.
    • Issue size of US$300.0 million
    • Financial close: March 2007
    • BDO Capital acted as Mandated Lead Arranger
    • Benefit to client: Proceeds allowed client to purchase government's indirect stake in Philippine Long Distance Telephone Company (PLDT).
    • Client contact: Mr. Joseph Ng, Chief Finance Officer, Tel: 852 9188-7667
       
12. BDO Private Bank
    • Zero-Coupon Long-Term Negotiable Certificates of Deposits
    • Issue size of Php2.19 billion
    • Issue date: June 2007
    • BDO Capital acted as Selling Agent
    • Benefit to client: Proceeds from the issue will be used.
    • Client contact: Mr. Jose Emmanuel Hilado, Senior Vice President, Tel: 632 848-6300, email: jnt@pb.bdo.com.ph
       
13. Republic of the Philippines
    • 3- and 5-Year Retail Treasury Bonds
    • Issue size of Php70.0 billion
    • Issue date: August 2007
    • BDO Capital acted as Selling Agent
    • Benefit to client: The deal was well received in the market and among the largest RTB issues. Proceeds of the offer will be used to finance government expenditures. As in previous RTBs, small investors can participate with a minimum investment of as small as Php5,000.00. BDO Capital has always been supportive of government issuances over the last few years.
    • Client contact: Mr. Eduardo Mendiola, Deputy Treasurer of the Philippines, Tel: 632 527-3183, Fax: 632 527-3183
       
14. SM Investments Corporation
    • Php4.5 billion 5-Year Redeemable Preferred Shares Issue
    • SMIC is the holding company of the SM Group of Companies, one of the largest conglomerates in the Philippines with business interests in commercial centers, retail and merchandising, financial services, and real estate development and tourism.
    • Issue date: August 2007
    • BDO Capital acted as Joint Issue Manager and Bookrunner
    • Benefit to client: Proceeds from the issue will be used to finance working capital expenditures.
    • Client contact: Mr. Jose Sio, Group CFO/Executive Vice President, Tel: 632 833-8120, email: jtsio@info.com.ph
       
15. San Miguel Corporation
    • US$1.2 billion Syndicated Term Loan Facility
    • Financial closing and drawdown: September 2007
    • BDO Capital acted as a Mandated Lead Arranger
    • Benefit to client: Proceeds will be used to partially refinance certain existing US$- and peso-denominated term loan and short-term debts of SMC.
    • Client contact: Ms. Eleanor P. Blomdahl, Vice President and Treasury Manager, Tel: 632 632-3900, email: eblomdahl@smg.sanmiguel.com.ph
       
       
B. League Table Position
       
Issuer/Borrower Facility and Amount BDO Capital’s Role
San Miguel Corporation US$1.2 billion Syndicated Term Loan Facility Mandated Lead Arranger
FP Capital Limited US$300.0 million Guaranteed Revolving Credit Facility Mandated Lead Arranger
DMCI-MPIC Water Company US$240.0 million Acqusition Facility Debt Advisor and Sole Arranger
Manila Electric Company Php12.0 billion 7-Year Fixed and Floating Corporate Notes Financial Advisor, Joint Issue Manager and Underwriter
Manila North Tollways Corporation Php5.5 billion 7-Year Fixed Rate Corporate Notes Joint Bookrunner and Lead Manager
South Luzon Tollway Corporation Php3.1 billion10-Year Syndicated Term Loan Lead Arranger
Globe Telecom Inc. Php2.8 billion 5-Year Floating Rate Corporate Notes Joint Issue Manager and Underwriter
SM Investments Corporation Php4.5 billion Redeemable Preferred Shares Issue Joint Issue Manager and Bookrunner
       
       
       
C. Largest and Most Significant Transactions and their Relevance to the Market and its Development
       
  BDO Capital lead arranged two out of two toll road financing for the period covered (three out of three if Coastal Road Extension is included the financing of which was also arranged and closed by BDO Capital in August 2006) in support of President Gloria Macapagal-Arroyo's challenge to the private sector to actively participate in the priority projects of her administration. Normally, Philippine toll road financing is difficult to arrange due to the political, regulatory and bureaucratic issues involved in the transaction, e.g., difficulty in acquiring the right-of-way, how income sharing will be implemented since toll roads pass several municipalities, bidding processes with contractors, etc. In addition, these projects have longer gestation period, thus loan tenors are usually extended. The three toll road financing successfully arranged by BDO Capital and funded by banks have proven that the local debt capital market is now ready to absorb transactions with longer tenors (7-10 years) and higher risks (as cash flows will come from toll income after the project has been completed and become operational).
       
  BDO Capital was joint bookrunner and lead manager for Manila North Tollways Corporation's ("MNTC") Php5.5 billion 7-Year Fixed-Rate Corporate Notes issued in November 2006. Likewise, BDO Capital acted as lead arranger for South Luzon Tollway Corporation's ("SLTC") Php3.1 billion 10-Year Syndicated Term Loan Facility closed in December 2006. MNTC operates the Manila North Expressway which connects Manila to northern Luzon while SLTC operates the South Luzon Expressway which links Manila to southern Luzon provinces.
       
  The toll road projects are seen to contribute to the further development of commerce and trade in the Philippines being the gateway linking Manila to neighboring provinces where most economic zones and industrial areas are located.
       
  BDO Capital continuously innovates debt-financing transactions for its clients, carefully structuring deals that will offer the best alternative to its clients. BDO Capital advised and lead arranged for the Manila Electric Company ("Meralco") its Php12.0 billion Refinancing Facility (entry for Best Deal Award) via issuance of fixed and floating corporate notes. The Meralco notes issue is touted as the largest privately placed debt issue in the Philippines executed in less than 2-months time and funded by all-local banks. The deal is also a landmark transaction for Meralco for two reasons: (a) replacement of Mortgage Trust Indenture as collateral from its previous borrowings (existing for almost 50 years) with negative pledge (clean) effectively loosening some restrictive covenants contained in their previous loan agreements; and (b) lowering of interest rates further through Dutch auction.
       
  The government bidded out and privatized the water concession of Maynilad Water Services Inc. ("MWSI"). BDO Capital advised and raised US$240.0 million for the winning bidder, DM Consunji Holdings Incorporated-Metro Pacific Investments Corporation ("DMCI-MPIC") Water Company.
       
  The corporate takeover that is expected to give new life to the Manila Waterworks and Sewerage System's ("MWSS") water supply program for Metro Manila and five municipalities and one city in Cavite. MWSI's exclusive service area comprises approximately 540 square kilometers of West Metro Manila and includes eight cities and three municipalities in the Metro Manila area and one city and five municipalities in Cavite province, which is a rapidly industrializing province in the Philippines located due south of the Greater Manila region. The total population of MWSI's service area exceeds 8 million and its network facilities include two water treatment plants and approximately 4,100 kilometers of pipes and aqueducts.
       
  The DMCI-MPIC takeover will boost MWSI's chances of completing its various expansion and rehabilitation programs that had been stalled due to financial difficulties. Government Corporate Counsel Chief Agnes Devanadera said "the value of privatization is a national policy of President Gloria Macapagal-Arroyo. It is a recognition of the private and public sector partnership in governance in the delivery of basic services."
       
  BDO Capital participated as a Mandated Lead Arranger in the US$1.2 billion Syndicated Term Loan Facility for San Miguel Corporation, one of the Philippines' largest conglomerates with business interests in food and beverage and packaging. The transaction is the largest US$-denominated loan facility in the Philippines issued by a local company and participated in by 31 lender-banks. Proceeds from the loan will be used by the company to refinance its existing long-term and short-term obligations. The loan is unsecured and covered by a negative pledge only.
       
D. Positive Influence of BDO Capital on the Development of Local Bond Market since October 1, 2006
       
  Currently, the Philippine debt market is not deep and focused mainly on privately placed issues (sale to not more than 19 investors). The public debt market is primarily for the Philippines' Bureau of the Treasury's fund-raising exercise to finance the expenditures of the government. Public issuances by private corporations are very limited as these are more expensive (SEC registration and rating are required) and take longer to execute. BDO Capital's participation (either as lead or secondary role) for the period covered is mostly on privately placed issues. Despite this, BDO Capital has contributed to the development of the local bond/debt market in the following ways:
       
  1. BDO Capital continuously tests the debt capital market, successfully arranging financing with longer tenors (5-12 years) and higher risks. Before, debt issuers relied heavily on insurance companies as funders of these transactions. However, recent debt capital-raising exercises have shown that banks are now ready to finance deals under these terms.
       
  2. BDO Capital continuously innovates debt-financing transactions for its clients, carefully structuring deals that will offer the best alternative to its clients. The Meralco Notes Issue is a very good example of this since said transaction carries many "innovations" in the Philippine debt capital market, i.e., largest privately placed refinancing facility funded by all-local banks with very swift execution time, replaced MTI security with negative pledge, resulting interest rate was lower than the backstop or underwritten rate made possible through Dutch auction.
       
  3. As most debt issues are privately placed, secondary market activities are limited due to restrictions imposed by the Securities and Exchange Commission for exempt transactions (i.e., number of lenders should be limited to 19 or less). But for government issues like Retail Treasury Bonds and BDO's Long-Term Negotiable Certificates of Deposits, BDO Capital continuously provides secondary market liquidity for its clients who wish to trade or liquidate their investment portfolios.
       
  4. A local company can successfully arrange financing even if denominated in another currency. Local investment houses normally tie up with foreign investment banks in arranging debt facilities denominated other than in pesos. However, as investors become more sophisticated coupled with the continuous development of the Philippine banking industry, U.S.$ facilities are no longer uncommon in the local market. For the period covered, BDO Capital lead arranged for both local and international clients a total of US$1.74 billion in loans, including the following:
       
    • DMCI-MPIC Water Company Inc.'s ("DMCI-MPIC") US$240.0 million Acquisition Facility closed in January 2007 (as Debt Advisor and Sole Arranger);
    • FP Capital Limited's US$300.0 million 5-Year Revolving Credit Facility Guaranteed by First Pacific Company Ltd. closed in March 2007 (as Mandated Lead Arranger); and,
    • San Miguel Corporation's US$1.2 billion Syndicated Term Loan Facility closed in September 2007 (as Mandated Lead Arranger).
       
  Currently, BDO Capital is lead arranging the refinancing of MWSI's existing debts. For the rest of 2007, BDO Capital has a healthy pipeline of upcoming mandated debt transactions where it will have lead roles including Lead Arranger and Underwriter for Quezon Power (Philippines), Limited Company's Up to US$70.0 million 7-Year Fixed-Rate Corporate Note Facility, Lead Arranger and Sole Bookrunner for First Philippine Holdings Corp.'s Up to US$250.0 million Syndicated Term Loan Facility and Joint Mandated Lead Arranger for SN Aboitiz Power's Up to US$380.0 million 10-Year Fixed-Rate Syndicated Term Loan Facility. All of these debt transactions are expected to be closed in October 2007.
       
       
     
       
       
  BDO Capital's Formula for Success
       
  BDO Capital believes that its continuing success in executing equities, debt capital and advisory/M&A transactions lies in its core strengths founded on the following:
       
1. Capital strength and stability through strong parent company support (SM and BDO Groups) and well-defined management objectives;
       
2. Sensitivity to clients' needs which are carefully assessed to obtain optimal solutions and appropriate recommendations;
       
3. Extensive experience in the "ins and outs" of equities, debt capital raising and advisory/M&A from origination to execution, and to a limited extent, secondary market trading;
       
4. Wide experience in various industries, including power generation and distribution, infrastructure/toll roads, telecommunications, real estate, banking and financial services, conglomerates, and food and manufacturing;
       
5. Strong distribution capability through BDO Group's branch networks and contacts which will be further enhanced by the upcoming merger with Equitable PCI Bank;
       
6. International linkages with other investment houses, fund managers, etc.;
       
7. Very cordial relationship with industry regulators such as PSE, the Securities and Exchange Commission, and the Philippine Depository and Trust Corporation;
       
8. Internally developed system to allow investors and sellers to go to any BDO branch to obtain pricing and facilitate transactions with BDO Capital;
       
9. Strong relationship between BDO Capital and clients which enables BDO Capital to obtain repeat business with clients. BDO Capital practically captures all equity transactions of the Andrew Tan Group of Companies which include Alliance Global Group, Inc. and Megaworld Corp. and most of the fund-raising exercises of the Lopez Group of Companies such as First Gen Corp., Manila Electric Company and Manila North Tollways Corp.;
       
10. Faster execution time owing to BDO Capital’s flat organizational structure.
       
11. Being a subsidiary of a bank, BDO Capital is able to refer fiduciary functions to other units of the bank such as trusteeship, registry, receiving bank, and transfer agency. In effect, BDO Capital virtually offers to its clients a “one-stop-shop” investment house.
       
       
     
       
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