LISTED port operator International Container Terminal Services Inc. (ICTSI), through its unit Royal Capital B.V., said Friday it successfully raised $375 million from a new debt securities offer, the proceeds of which were used to repay existing debt securities.
In a statement, ICTSI said Royal Capital successfully repurchased $345.5 million of its outstanding perpetual securities via tender offer, which was funded by the newly raised $375 million in fresh funds from the issue of its new senior perpetual securities guaranteed by ICTSI.
The debt management initiative allows ICTSI “to further strengthen its capital structure while realizing significant cost savings,” the port operator said.
The new securities offer, which has a yield rate of 4.875 percent per annum payable semi-annually, was concluded on October 13.
According to ICTSI, the rate of the new securities “will be reset every five years from May 5, 2024 and will increase by 2.50 percent per annum” thereafter, if in case the securities were not yet redeemed by Royal Capital at that time.
ICTSI said the new securities offer was widely subscribed, with fund managers accounting for 46 percent, private banks for 30 percent, and banks for 24 percent. By location, 82 percent of the security holders were from Asia while 18 percent were from Europe.
“This capital management exercise is strategic and value accretive in many respects, the two most important of which are the extension of the call duration on almost half of ICTSI’s outstanding senior perpetual securities, and securing guaranteed annual cost savings from the lower distribution rate. We are pleased to have achieved these objectives particularly given the volatile market backdrop,” said Rafael D. Consing, ICTSI senior vice president, chief financial officer and chief compliance officer.
Citigroup Global Markets Ltd, The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) and Standard Chartered Bank served as the joint lead managers and joint bookrunners for the issue.
ICTSI operates a total of 30 common user container terminals located in 20 countries with a focus on facilities having total annual throughputs ranging from 50,000 to 2.5 million twenty-foot equivalent units (TEUs).