ICTSI successfully prices new perpetual securities issuance and announces results of tender offer

ICTSI successfully priced a new USD300,000,000 senior perpetual capital securities callable in May 2026, which garnered significant investor demand and effectively extended their debt maturity profile. In addition, ICTSI also embarked on a liability management exercise which further strengthened its capital structure while realizing cost savings. 

On July 7, 2020, International Container Terminal Services, Inc. (“ICTSI”) and Royal Capital B.V. (the “Issuer”) successfully priced a USD300,000,000 offering of senior perpetual capital securities, guaranteed by ICTSI (“New Perpetual Securities”). The New Perpetual Securities were structured to constitute equity under International Financial Reporting Standards and represent ICTSI’s fifth successful perpetual securities issuance.

The New Perpetual Securities confer a right to receive distributions at an initial rate of 5.00% per annum and were priced at 98.979% with a reoffer yield of 5.20% per annum. The New Perpetual Securities shall 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 (and including) February 5, 2026 (the “First Call Date”) to (and including) May 5, 2026 (the “Step Up Date”), or on any semi-annual distribution payment date thereafter. The rate of distribution for the New Perpetual Securities will be reset on the Step Up Date and every five years thereafter. 

The New Perpetual Securities were widely distributed with fund managers/asset managers, private banks, insurance companies and banks/pension funds accounting for 64%, 18%, 12% and 6% respectively. By geography, Asia accounted for 91% while Europe were allocated the remaining 9%. 

In addition, an aggregate nominal principal amount of USD65,483,000 in the Issuer’s 5.50% senior perpetual capital securities callable in May 2021 (the “Existing Perpetual Securities”) was submitted by Securityholders in the Tender Offer (the “Tender Instructions”). ICTSI offered Securityholders a price of USD1,007.50 per USD1,000 in principal amount of Existing Perpetual Securities. The Issuer accepted all valid Tender Instructions submitted and has 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 5.625% 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. 

ICTSI Senior Vice President and Chief Financial Officer Rafael J. Consing remarked, “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.”

Citigroup Global Markets Limited, The Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank acted as Joint Lead Managers and Joint Bookrunners for the New Perpetual Securities issuance and as Joint Dealer Managers for the Tender Offer.

ICTSI is a leading global container port operator and currently owns and operates a geographically diverse portfolio of 31 terminals in 18 countries across 6 continents.

This press release does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the Philippines. The New Perpetual Securities 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 New Perpetual Securities 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 New Perpetual Securities 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 New Perpetual Securities 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. Neither of the Issuer nor ICTSI intends to register any of their securities in the United States. No public offering of securities of the Issuer or ICTSI will be made in the United States or in any other jurisdiction where such an offering is restricted or prohibited.