ICTSI taps offshore bond market to raise $300M
Razon group-led International Container Terminal Services Inc. is poised to raise at least $300 million through a new offering of perpetual securities to the offshore bond market.
Subsidiary Roval Capital BV will issue the senior perpetual securities (perps) which will be guaranteed by parent company ICTSI, the port operator disclosed to the Philippine Stock Exchange on Friday.
“This is an opportunistic new issue of perps, targeting minimum benchmark size,” ICTSI chief financial officer Rafael Consing Jr. said in a text message.
A typical benchmark size is about $300 million, he added.
A perpetual bond or “perp” is a fixed income security with no maturity date. Unless bought back by the issuer, these securities pay a steady stream of interest payments based on a fixed coupon rate.
ICTSI last issued offshore bonds during a liability management exercise in October 2016. At that time, the international port operator bought back $345.5 million of its outstanding perpetual securities via a tender offer, funded by the $375-million issuance of new perps. The deal allowed ICTSI to strengthen its capital structure and save on interest payments.
For this issuance, the final terms and conditions—including the issue amount and distribution rate—will be determined and approved by the respective boards of directors of Royal Capital BV and ICTSI in the coming weeks, based on the disclosure.
The group has mandated Citigroup Global Markets Ltd., Credit Suisse (Hong Kong) Ltd. and Standard Chartered Bank as joint lead managers for the new offering of perps.
ICTSI’s offering will be made pursuant to Regulation S under the United States Securities Act of 1933, which provides an exemption from the registration of securities offered and sold outside of the United States.
Valued by the local stock market at P217.7 billion, ICTSI is a leading global developer, manager and operator of container terminals in the 50,000 to 2.5 million TEU (twenty-foot equivalent units) per year range. It operates in 18 countries in six continents and continues to pursue container terminal opportunities around the world.
The group is continuing to expand its operations here and abroad. Recently, it has expressed interest in acquiring 65 percent of Evyapport, Turkey’s fourth largest private port. The company is still in the process of conducting its due diligence on Evyaport at this time. —DORIS DUMLAO-ABADILLA
