Philippine Airlines offers a landmark issuance of USD300 million 7.75% five-year senior unsecured guaranteed notes via its wholly owned subsidiary Primero Agila. Clifford Chance, SyCip Salazar Hernandez & Gatmaitan (SyCipLaw), Picazo Buyco Tan Fider Santos & Dee (Picazo Law) and Latham & Watkins advised on the issuance.
The transaction marked the first rated high-yield bond offering by a Philippine issuer in more than 10 years, the first unsecured rated high-yield bond issued by an Asian airline and the first rated airline bond issuance from South and Southeast Asia, Latham & Watkins said. The notes are listed on the Singapore Exchange and guaranteed by Philippine Airlines and the Air Philippines Corporation.
Latham & Watkins and SyCipLaw counselled Philippine Airlines, while Clifford Chance advised Deutsche Bank and BNP Paribas, joint book runners. Deutsche Bank was also the sole global co-ordinator for the bond issuance.
Picazo Law also advised Deutsche Bank and BNP Paribas, with managing partner Gabriel Dee spearheading the team.
“We advised the bankers. Apart from the usual due diligence on any consent that may be needed, we also made sure that the guarantees issued by the Philippine guarantors (PAL among others) are compliant with Philippine law,” Dee told Asia Business Law Journal.
Clifford Chance partner Alan Yeung led the team with support from counsel Stephanie Liman, associate Valerie Chan and trainee solicitor Cameron McGauchie. Partner Emily Wicker advised on airline industry aspects and partner Avrohom Gelber provided US tax advice.
SyCipLaw partner Melyjane Bertillo-Ancheta advised Philipoine Airlines on local matters connected with the transaction.
The Latham & Watkins team included partners Benjamin Carale, head of the firm’s Philippines-focused team, and Rajiv Gupta, head of the India practice, alongside counsel Jeremy Wang. Associates Diana Dizon and Margarita del Rosario provided additional support.
The offering drew strong demand from a broad international investor base, resulting in a final orderbook exceeding USD1.4 billion, which represents an oversubscription of 4.5 times, Latham & Watkins said.
The proceeds will support Philippine Airlines’ transformation and long-term growth plans, including fleet modernisation and the expansion of its international network.
