By Jenniffer B. Austria

The Securities and Exchange Commission en banc approved Globe Telecom Inc.’s proposed P4-billion bond issue.

The company will issue three-year and five-year fixed rate bonds worth P3 billion and allow an over- subscription of up to P1 billion. The issue started on Thursday and will end Feb. 19.

The three-year bonds, which carry fixed interest rate of 7.5 percent per annum, will mature on Feb. 25, 2012, while the five-year bonds with an interest rate of 8 percent per annum are due on Feb. 26, 2014.

Globel Telecom plans to use the net proceeds from the issue to partially finance the company’s capital expenditure requirements this year.

The company plans to spend between $400 million and $430 million, including carryover expenditures from last year’s projects. The amount includes about $150 million in wired and wireless broadband capabilities for consumer markets and $130 million in capital expenditure for the company’s core mobile business to enhance network resiliency and deepen coverage in areas where demand is still growing.

This year’s capital outlay includes $60 million in investments in the corporate enterprise business and $25 million for international transmission links to support the mobile, consumer broadband and enterprise business.

Globe Telecom’s expenditures next year will focus on expanding the company’s wired and wireless broadband business and ensuring the continued strength and competitiveness of its core cellular business.

The P4-billion bond issue is part of the P10-billion bond offering earlier filed by Globe Telecon with the SEC. The company plans to use the balance of the proceeds to finance future capital expenditure requirements.

Philippine Ratings Services Corp. earlier assigned a credit rating of PRS Aaa to Globe Telecom’s P10-billion bond issue.

This is the highest mark in PhilRatings’ long-term credit rating scale and is assigned to long-term debt securities with the smallest degree of default risk. This also means that interest payments are protected by a large or exceptionally stable margin, and that the principal amount is secured.