D&L Is About to Wipe Out Its Last ₱2-Billion 2021 Bond — But the Bigger Story Is What Changed in Its Cash Flow
MANILA, Philippines — D&L Industries Inc. is preparing to close the book on the final portion of a ₱5-billion bond program launched five years ago, with the listed food ingredients and specialty chemicals manufacturer set to redeem ₱2 billion worth of bonds on September 14, 2026.
The repayment may look like a routine debt maturity on paper. But it comes at a significant moment for the Lao family-led company: D&L is generating stronger free cash flow, its massive Batangas expansion is largely complete, and management has been steadily working to bring leverage down.
According to a September 7 disclosure to the Philippine Stock Exchange, D&L will fully redeem its five-year Series B bonds due 2026 at maturity. Bondholders will receive 100% of the issue price plus accrued and unpaid interest based on the bonds’ 3.5962% annual coupon rate.
InsiderPH reported that the total payment is expected to reach about ₱2.018 billion, including principal and accrued interest before applicable taxes. Holders recorded as of September 10 are expected to receive payment through the Philippine Depository & Trust Corp.
The ₱2-billion payment ends a five-year funding chapter
The bonds are the remaining portion of D&L’s maiden ₱5-billion fixed-rate bond offering in September 2021.
At the time, D&L issued ₱3 billion in three-year Series A bonds carrying a 2.7885% coupon and ₱2 billion in five-year Series B bonds carrying a 3.5962% coupon.
Investor demand for the offering was unusually strong. D&L said bids reached roughly ₱13.8 billion, equivalent to about 4.6 times the original ₱3-billion base offer, allowing the company to exercise its ₱2-billion oversubscription option.
The money was not raised simply to pad the company's balance sheet.
D&L intended to use the proceeds mainly to help finance its major manufacturing expansion in Batangas and partly repay bridge loans previously used to fund capital expenditures. The expansion was envisioned as a major platform for producing higher-value coconut-based products and expanding D&L's international business.
The company already repaid the ₱3-billion Series A portion in September 2024, leaving the ₱2-billion Series B issue as the last outstanding component of the original 2021 bond offering.
That means the September 14 redemption effectively completes D&L's obligations under its maiden ₱5-billion bond issue.
Why the timing matters
D&L is not merely approaching a bond maturity. Its financial profile has also begun moving in a more favorable direction after years of heavy investment and volatile raw-material prices.
For the first half of 2026, D&L generated ₱2.3 billion in positive free cash flow, helped by lower working-capital requirements, easing coconut oil prices and relatively muted capital expenditures.
Management said it does not expect major capital spending in the near term following completion of the Batangas plant, potentially allowing more cash to be directed toward reducing debt and strengthening the balance sheet.
Net gearing fell to 91% at the end of June 2026, from 96% at the end of 2025. Debt-to-EBITDA improved to 3.7 times from 4.3 times, while interest coverage strengthened to 3.9 times in the second quarter from 3.2 times in full-year 2025.
D&L's average cost of debt also edged down to 5.90% from 6.01%.
Those figures matter because the company accumulated significant borrowing requirements while building its Batangas facility and dealing with extraordinary swings in commodity prices.
As of June 30, D&L reported approximately ₱23.81 billion in total debt outstanding, according to its quarterly regulatory report.
The ₱2-billion bond redemption therefore does not eliminate D&L's broader debt load, nor does it automatically mean net debt will fall by the full ₱2 billion. The company is specifically extinguishing a bond obligation that has reached its scheduled maturity.
But improving free cash flow gives the company considerably more flexibility than during the capital-intensive phase of its Batangas expansion.
Earnings are improving as well
D&L's first-half 2026 net income climbed 8% year-on-year to ₱1.5 billion, while second-quarter earnings increased 10% to ₱786 million.
Higher-margin specialty products accounted for 51% of sales during the first half, while improving coconut oil prices helped margins recover in the company's food ingredients division.
President and CEO Alvin Lao has said the normalization of coconut oil prices and the improvement in the food ingredients business suggest that the segment may have reached an earnings inflection point.
The company nevertheless continues to face risks from geopolitical tensions, supply-chain disruptions, inflation and elevated borrowing costs.
From expansion debt to cash generation
D&L's 2021 bond offering was raised during a very different economic environment.
Interest rates were low, the pandemic was still disrupting businesses and construction schedules, and D&L was committing billions of pesos to its Batangas expansion.
Five years later, that factory is operational, capital expenditure requirements have normalized and free cash flow has turned positive.
The September 14 redemption therefore represents more than the expiration of another corporate bond.
It marks the end of the financing package that helped D&L build one of the most important expansion projects in its history — and shifts investor attention toward the next question:
Can the company now turn stronger cash generation and its expanded Batangas capacity into sustained earnings growth while bringing leverage materially lower?
That, rather than the ₱2-billion maturity alone, may ultimately determine how significant this repayment becomes for D&L shareholders.
WWC ONE MEDIA M.J.E