International Container Terminal Services, Inc. (“ICTSI” or the “Issuer”), successfully priced a US$400 million offering of 10-year senior unsecured notes (the “Notes”). The offering will mark ICTSI’s return to the senior unsecured notes market, having last completed a fixed-for-life perpetual capital securities transaction in January 2018.
Net proceeds from the issue of the Notes will be used to refinance and extend the maturity of ICTSI’s liabilities and for general corporate purposes.
The transaction furthers ICTSI’s prudent balance sheet management and capital structure optimization initiatives in response to the economic disruption due to the COVID-19 pandemic.
The Notes were priced with a fixed coupon of 4.750% p.a., payable on a semi-annual basis and a price of 99.607 to yield 4.800% p.a. Upon issuance, the Notes will constitute direct, unconditional, unsubordinated, and unsecured obligations of the Issuer, pari passu without any preference among themselves and with all other outstanding unsecured and unsubordinated obligations of the Issuer.
ICTSI’s global, diversified footprint and uniquely focused origin and destination portfolio were central to investor appeal. The offering attracted strong demand from a wide array of accounts and pricing was compressed 45 basis points from initial marketing to final pricing levels.
Demand allocable at final pricing was in excess of US$1.85 bn from over 111 accounts, equivalent to orderbook oversubscription of over 4.6x. The Notes were widely distributed with fund and asset managers allocated approximately 65% of the offering, banks and private banks, 21%, and insurance and pension funds, 14%. By geography, Asia, EMEA, and offshore U.S. investors took approximately 80%, 19%, and 1%, respectively.
The transaction is significant in several respects. ICTSI moved swiftly to capitalize on the conducive market backdrop and pent-up investor demand to be the first Philippine corporate issuer to access the international bond markets following the volatility from the COVID-19 pandemic and the drop in oil prices. Upon issuance, the Notes will also be the first corporate bond offering from the Philippines to feature investment grade terms with no financial or leverage covenants.
ICTSI’s Senior Vice President and Chief Financial Officer, Rafael D. Consing, Jr. remarked, “This transaction is in line with our focus on prudent balance sheet management, which allows us to sustainably execute on our business strategies and increase ICTSI’s resilience particularly in this time of economic disruption.”
Citigroup, Credit Suisse and J.P. Morgan acted as Joint Lead Managers and Joint Bookrunners for the offering of the Notes.
ICTSI is currently involved in 31 container terminal facilities in 18 countries worldwide, with a focus on origin and destination and gateway ports in emerging and frontier markets.
This press release does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the Philippines. The Notes have not been and will not be registered with the Philippine Securities and Exchange Commission under the Securities Regulation Code of the Philippines (the “SRC”). Each Joint Lead Manager and Joint Bookrunner has represented, warranted and agreed that it has not and will not sell or offer for sale or distribution any Notes in the Philippines except to “primary institutional lenders” pursuant to Rule 10.1.4 of the 2015 Implementing Rules and Regulations of the SRC or to “qualified buyers” pursuant to Section 10.1(I) of the SRC.
The solicitation of offers to sell described in this press release is not being made, directly or indirectly, in or into the United States, or by the use of mails, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, e-mail and other forms of electronic transmission) of interstate or foreign commerce, or of any facility of a national securities exchange, of the United States and no offer to sell may be made by any such use, means, instrumentality from or within the United States.
This press release does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the United States or other jurisdiction. The Notes will be offered and sold outside the United States in reliance on Regulation S under the Securities Act and may not be offered or sold within the United States absent registration or an exemption from registration under the Securities Act. ICTSI does not intend to register any of its securities in the United States. No public offering of securities of ICTSI will be made in the United States or in any other jurisdiction where such an offering is restricted or prohibited.