ICTSI subsidiary’s bond issue warmly received
MANILA, Philippines—A unit of international port operator International Container Terminal Services Inc. (ICTSI) raised the curtains in the Asian corporate hybrid market this year with a warmly received $150-million perpetual bond offering.
This was a reopening of the 8.375-percent unrated subordinated perpetual bond issuance by the ICTSI unit Royal Capital BV in May 2011 and guaranteed by ICTSI itself. The completion of this additional fund-raising hiked the size of the debut perpetual capital securities issue—considered equity from the point of view of the issuer but with some features of a debt instrument—to $350 million.
“ICTSI is cognizant of the competitive new issue pipeline in the global capital market and thus seized this window of opportunity to tap our perps [perpetual capital securities]. The oversubscription validates strong investor appetite for ICTSI as well as the hybrid structure,” ICTSI treasurer Rafael Consing Jr. said.
The issuance was warmly received with total orders reaching $400 million from over 60 accounts, said Wick Veloso, managing director, treasurer and head of global markets at HSBC Philippines.
HSBC was the sole structuring adviser for this deal while Citi and HSBC were joint lead managers and bookrunners.
“The original transaction represented the first US dollar international corporate hybrid from an unrated issuer in Asia ex-Japan and also the first international corporate hybrid transaction from a Philippine issuer,” Veloso said, noting that this issue has been one of the best-performing corporate hybrids from Asia in 2011.
Distribution was well balanced across private banks (50 percent), asset managers (40 percent) and banks (10 percent), Veloso reported. By geography, 15 percent was earmarked for the Philippines, 80 percent for the rest of Asia and 5 percent for Europe.
Initial guidance was at a cash price of 98 percent of par, which was subsequently revised to 98.250 percent plus or minus 0.125 percent and the transaction was priced at 98.375 percent.
