Port operator International Container Terminal Services Inc. (ICTSI) on Monday launched a tender offer for its 5.5 percent senior guaranteed perpetual bonds worth $450 million.
In its disclosure, the company said ICTSI unit Royal Capital B.V. will repurchase outstanding bonds starting July 6 until July 14. The company said it had the right to extend the said tender offer period if necessary, subject to market conditions.
The company said some $264.86 million of its perpetual bonds are currently outstanding.
The board of ICTSI also approved Royal Capital’s issuance of new senior perpetual securities guaranteed by the port operator.
“The company is undertaking the tender offer [through the issuer] as part of its strategy to manage the profile of its existing financings,” ICTSI said.
The company has appointed Citigroup Global Markets Ltd., The Hongkong and Shanghai Banking Corp. Ltd. and Standard Chartered Bank as joint lead managers for the new securities offer and as dealer managers for the tender offer. It also appointed Morrow Sodali Ltd. as information agent for the tender offer.
Earlier last month, ICTSI raised some $400 million from its offering of 10-year unsecured senior notes in the offshore market, the first local company to do so against the backdrop of the coronavirus pandemic.
This is the first time that the port operator tapped the offshore market in two years, since its offering of perpetual bonds in 2018.
Proceeds of the notes issuance will be used to refinance and extend the maturity of ICTSI’s liabilities and for general corporate purposes.
The notes were priced with a fixed coupon of 4.75 percent per year, payable on a semi-annual basis and a price of 99.607 to yield 4.8 percent per year.
Billionaire Enrique K. Razon Jr., ICTSI chairman, earlier said he will keep on expanding the company’s portfolio even as the company has decided to reduce its capital expenditures to a minimum.
“But even during this crisis, we are still keenly on the lookout for opportunities to expand our portfolio and continue to be very active in seeking out potential acquisitions or new projects whose potential or valuation makes sense in this environment,” Razon said during the company’s stockholders’ meeting last month.
“Given the great uncertainty of many economies and the global economy itself, we have shored up our balance sheet, and we will continue to seize every opportunity to further strengthen our finances going forward.”
At the moment, the company already controls most of the profitable ports nationwide. ICTSI is also embarking on the modernization of the Iloilo Commercial Port Complex and the Port of Dumangas.
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