ICTSI secures $350-M loan facility to boost operations

Listed ports operator International Container Terminal Services Inc. secured a $350-million loan facility to support its global operations, the company said in a disclosure to the Philippine Stock Exchange on Thursday.

ICTSI, which is controlled by businessman Enrique Razon Jr., said the syndicated revolving credit facility would be the first such structure to be established by an Asian corporation.

The program is meant to serve as a “master platform” from which other loan type financing instruments can be issued as required. It also serves to harmonize the so-called covenants, undertakings and other generic terms across the capital structure of ICTSI with its existing Euro Medium Term Note program.

“The funds available under the program will be used for strategic investments and acquisitions, in addition to general corporate purposes,” ICTSI said.

Under the terms of the facility, ICTSI would serve as guarantor while subsidiary ICTSI Global Finance B.V. would act as borrower.

“This transaction highlights the core attributes currently most suitable to our funding needs—streamlined execution, reduced negative interest carry, incurrence-based covenant regime and a well diversified bank syndicate,” Rafael Consing Jr., ICTSI vice president and treasurer, said in a text message.

The program and the first revolving credit facility were arranged by Australia and New Zealand Banking Group Ltd. and Standard Chartered Bank, with the Singapore branch of Bank of New York Mellon acting as trustee for the program. Standard Chartered Bank (Hong Kong) Ltd. acted as agent for the revolving facility, the filing showed.

The facility was originally set at $250 million and was subsequently increased to $350 million on the back of strong demand from banks from the Asia-Pacific syndicated loan market.

Total order book stood at $835 million. It was 3.34 times oversubscribed, drawing the interest of 24 domestic, regional and international banks. The success of the transaction is a strong testament to the capital market’s confidence in the credit strength of ICTSI.

The company has been ramping up its expansion overseas, especially in emerging markets, to sustain gains in profit and revenue. ICTSI earlier said that first quarter profit hit $52.4 million, up 29 percent, bolstered by a nonrecurring gain.

Revenues from operations during the period rose 19 percent to $248.9 million. ICTSI said net income would have been higher by 6 percent to $45.1 million if non-recurring items in the first quarter were to be removed.

The company’s seven key terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar, China and Pakistan accounted for 71 percent of the group’s consolidated volume in the first quarter of 2014.