A subsidiary of International Container Terminal Services Inc. is launching a tender offer for the $350 million worth of perpetual bonds it issued in 2011 to 2012 and will offer new securities.
These moves are expected to result in savings for the flagship firm of ports magnate Enrique Razon Jr.
ICTSI said in a stock exchange filing Monday that its subsidiary, Royal Capital B.V., had announced the cash offer to holders of its 8.375 percent subordinated guaranteed perpetual capital securities. The tender offer ends on Jan. 21 (5 p.m. Central European Time), ICTSI said.
In the same filing, ICTSI said Royal Capital would issue a new tranche of senior perpetual securities guaranteed by ICTSI, although no details were available yet on the size and interest rate.
“This tender offer for ICTSI’s outstanding perpetual bonds offers substantial cost savings and call duration extension opportunities for the company,” ICTSI vice president and treasurer Rafael J. Consing Jr. said in a text message yesterday. “Similarly, it affords investors the ability to lock in profits.”
Consing added that ICTSI “has a menu of financing options to fund this tender offer that will result in value accretion and long term cost savings for the company.”
ICTSI, whose port operations extend from the Philippines to several emerging markets around the world, noted that the tender offer was conditional on the pricing of the new securities and signing of subscription agreements between the company and managers appointed for the offer.
The filing showed that the announcement for the minimum yield on the new securities was slated for Jan. 19 while the pricing has so far been set for Jan. 22.
ICTSI has tapped Citigroup Global Markets Limited and The Hong Kong and Shanghai Banking Corporation Limited as joint lead managers and Deutsche Bank as co-manager for the new securities offer, the filing showed.
ICTSI earlier announced that profits in the nine months through September 2014 rose 5 percent to $135.7 million, buoyed by higher revenues and nonrecurring gains.
The company said revenue from port operations hit $779.2 million, up 25 percent. It noted gains were partially offset by increased depreciation charges and higher levels of interest expense driven by the commencement of commercial operations at Manzanillo, Mexico (CMSA) and Puerto Cortes, Honduras (OPC).