ICTSI completes securities offering

International Container Terminal Services Inc., controlled by ports tycoon Enrique Razon Jr., completed a new securities offer that allowed it to strengthen its balance sheet and lower financing costs.

ICTSI and subsidiary Royal Capital BV issued $375 million worth of 4.875-percent perpetual securities, redeemable by 2024.

That offer mainly funded the tender offer of $345.5 million of its 6.25-percent senior perpetual capital securities callable in 2019 and 5.5- percent senior perpetual capital securities callable in 2021.

ICTSI earlier said it wanted to buy back up to $400 million of its older securities.

“This capital management exercise is strategic and value accretive in many respects,” ICTSI senior vice president and chief financial and compliance officer Rafael Consing said in a statement.

“The two most important of which are the extension of the call duration on almost half of ICTSI’s outstanding senior perpetual securities, and securing guaranteed annual cost savings from the lower distribution rate,” he added.

Referring to the new securities offer, ICTSI said the rate of distribution would be reset every five years from May 5, 2024 and would increase by 2.5 percent per year starting May 5, 2024.

The new perpetual securities were widely distributed with fund managers accounting for 46 percent, private banks for 30 percent, and banks for 24 percent, ICTSI said. By geography, Asia took up 82 percent with Europe at 18 percent.

ICTSI said the tender offer was the first such transaction targeting repurchase of US dollar perpetual securities in Asia this year. Moreover, the new offer was the longest noncall date for any Asian corporate hybrid security to date, it added.

Citigroup Global Markets Ltd., The Hongkong and Shanghai Banking Corp. Ltd. and Standard Chartered Bank acted as joint lead managers and joint bookrunners for the new offer and as dealer managers for the tender offer.