Philippines' San Miguel gets consents to amend three series of notes

By Susanna Moon

Chicago, Feb. 8 - San Miguel Brewery Inc. said that holders representing 76.92% of its PHP 38.8 billion of bonds consented to replacing the minimum current ratio of 1 times with a minimum interest coverage ratio of 4.75 times.

As a result, the company executed the supplemental agreement amending its 8¼% series A bonds due 2012, 8 7/8% series B bonds due 2014 and 10½% series C bonds due 2019.

Payment for the consents will be made within three business days from the execution of the supplemental agreement, which is when the agreement will take effect, according to a company press release.

As previously noted, the company needed to obtain consents from holders of at least 51% of the bonds.

San Miguel will pay a consent fee of PHP 1.25 per PHP 1,000 principal amount of bonds to holders of record as of Dec. 8 who delivered their consents by the expiration date. Holders who delivered their consents by the early deadline will receive an additional PHP 1.00 for each PHP 1,000 of bonds.

The deadline for the consent solicitation, which began on Dec. 26, was moved up to Jan. 12 and was originally set to end at 4 a.m. ET on Jan. 27, with the early tender deadline also set for Jan. 12.

San Miguel announced in December that it wanted to replace the minimum current ratio, or current assets to current liabilities, with a minimum interest coverage ratio, or consolidated EBITDA to gross interest expense.

The company said that the minimum interest coverage ratio was a better measure of financial health, because it indicated whether the company had sufficient margin in operating profit to cover increases in the cost of debt.

"It is believed to be a stronger measure of protecting the interest of lenders, as it provides an early sign of the company's ability to manage liabilities," a previous release noted.

ING Bank NV, Manila Branch is the adviser for the consent solicitation. BDO Capital and Investment Corp. and First Metro Investment Corp. are the joint lead associates. Other associates include BPI Capital Corp., China Banking Corp., the Hongkong and Shanghai Banking Corp. Ltd., RCBC Capital Corp., SB Capital Investment Corp. and Standard Chartered Bank. Bank of the Philippine Islands - Asset Management and Trust Group and Philippine Depository & Trust Corp. are the trustee and registrar, respectively.

San Miguel Brewery, a subsidiary of San Miguel Corp., is a Mandaluyong City, Philippines-based producer of beer.

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