ICTSI to raise $300M from int’l bond market

MANILA, Philippines—A unit of global port operator International Container Terminal Services Inc. (ICTSI) will raise $300 million from the overseas bond market to take advantage of low interest rates, the company said on Wednesday (Nov. 10).

In a disclosure to the Philippine Stock Exchange, the flagship firm of billionaire tycoon Enrique Razon Jr. said the new senior fixed rate notes will be issued by ICTSI Treasury B.V. and will be guaranteed by the parent firm. It will have a tenor of 10 years and will pay a yield of 3.5 percent.

The proceeds will be used for refinancing and general corporate purposes including, among others, to potentially fund a tender offer for certain existing senior guaranteed perpetual capital securities of its subsidiary, Royal Capital B.V., guaranteed by the company, it added.

ICTSI has hired Citigroup Global Markets Limited and The Hong Kong and Shanghai Banking Corporation Limited as joint lead managers for the issue.

The company also disclosed that it had signed an agreement with the joint lead managers for the issuance of new notes to replace the current ones being held by Royal Capital’s creditors which will be retired to take advantage of lower interest rates.

These new debt papers will not be offered for sale locally except under circumstances where they qualify as exempt securities under local securities laws.

Earlier this week, ICTSI has offered to buy back up to $775 million worth of offshore perpetual bonds and replace them with new securities.

The company said its board had approved a tender offer by its subsidiary, Royal Capital BV, for the holders of its $400-million outstanding perpetual securities carrying an interest rate of 5.8875 percent per annum.

The same offer will be issued to holders of Royal Capital’s $375-million, 4.875-percent perpetual notes.

“The company is undertaking the tender offer [through Royal Capital] as part of its strategy to manage the profile of its existing financing,” ICTSI said.

TSB