Port operator International Container Terminal Services Inc. and unit Royal Capital B.V. said Thursday they successfully priced a US$300-million offering of senior perpetual capital securities guaranteed by the parent company.
The new perpetual securities were structured to constitute equity under International Financial Reporting Standards and represented ICTSI’s fifth successful perpetual securities issuance.
The new perpetual securities confer a right to receive distributions at an initial rate of 5 percent per annum and are priced at 98.979 percent with a re-offer yield of 5.20 percent per annum.
They will rank pari passu with all other outstanding unsubordinated obligations of the issuer, who will have the right to redeem the new perpetual securities on any day from Feb. 5, 2026 to May 5, 2026, or on any semi-annual distribution payment date thereafter.
The rate of distribution be reset on the step up date and every five years thereafter.
ICTSI said the securities were widely distributed with fund managers/asset managers, private banks, insurance companies and banks/pension funds accounting for 64 percent, 18 percent, 12 percent and 6 percent respectively. By geography, Asia accounted for 91 percent while Europe was allocated the remaining 9 percent.
It said an aggregate nominal principal amount of US$65,483,000 in the issuer’s 5.50 percent senior perpetual capital securities callable in May 2021 was submitted by security holders in the tender offer.
ICTSI offered security holders a price of $1,007.50 per US$1,000 in principal amount of existing perpetual securities. The Issuer accepted all valid tender instructions submitted and decided to further extend the offer period to July 29, 2020.
“The transaction is significant in several aspects. The new perpetual securities benefitted from robust investor demand, allowing ICTSI to implement its largest-ever senior perpetual capital securities tightening of 42.5 bps from initial price guidance of 5.62 percent area. This transaction also marks ICTSI’s first perpetual securities issuance since January 2018. The concurrent tender offer was an investor friendly offering that facilitated investors who wished to roll over to the New Perpetual Securities whilst improving carry efficiency for ICTSI,” it said.
“ICTSI’s overall financing and liability management exercise is one of three levers that we focused on in response to the ongoing global pandemic, the other two being the tactical delay in capital expenditures and sustainable cost reduction. This exercise achieved our objectives of reducing capital cost, eliminating call redemption risk in 2021, and further enhancing the strength of ICTSI’s balance sheet,” said ICTSI senior vice president and chief financial officer Rafael Consing.
Citigroup Global Markets Limited, The Hongkong and Shanghai Banking Corp. Limited and Standard Chartered Bank acted as joint lead managers and joint bookrunners.