JG Summit unit to raise $500M

AN OFFSHORE unit of JG Summit Holdings Inc. plans to tap the offshore bond market to raise as much as $500 million in fresh funds.

In a disclosure to the Philippine Stock Exchange Friday, JG Summit disclosed that its wholly owned JGSH Philippines Ltd. intended to issue-—subject to market conditions-—US-dollar fixed rate notes.

Banking sources estimated that JG Summit might raise as much as $500 million from the offshore bond foray. The company, however, has yet to firm up the offering size.

The disclosure said Citigroup Global Markets Ltd., Credit Suisse Securities (Europe) Ltd. and The Hongkong and Shanghai Banking Corp. Ltd. were engaged as joint bookrunners and joint lead managers for the proposed unrated “Regulation S (Reg S)” offering. The “Reg S” format means that the securities will be sold to global investors outside the United States. It is proposed that JG Summit act as the guarantor of the notes.

“The board of directors of the company has authorized its management to determine the extent of its participation as a guarantor as well as to finalize the terms and conditions of such guarantee,” the disclosure said.

Meanwhile, International Container Terminal Services Inc., through subsidiary ICTSI Treasury B.V., reopened the offshore Philippine debt capital markets, having priced its offering of $300 million, 4.625-percent senior unsecured notes. The notes were issued as part of the company’s inaugural $750-million medium-term note program, the first among Philippine corporations.

The transaction was announced with an initial guidance of 5.250 percent but it was eventually priced at a yield of 4.75 percent, the tight end of the final price guidance, representing the lowest yield ever achieved on a US-dollar denominated 10-year bond by a Philippine firm to date. The notes will bear a fixed interest coupon of 4.625 percent a year, with interest payable semi-annually in arrears.

The transaction, which was jointly arranged by HSBC and UBS, was almost 18 times over-subscribed with an order book totaling $5.5 billion from 180 high-quality fixed-income investors.

“We are deeply grateful to all our partners who have continued to support ICTSI. This is a testament to ICTSI’s status as a leading and innovative Philippine issuer in the international markets,” said ICTSI Treasurer Rafael Consing Jr. Doris C. Dumlao