ICTSI to raise $250 million via dollar notes issue

MANILA, Philippines - International Container Terminal Services Inc. (ICTSI) is raising $250 million from the issuance of dollar-denominated corporate notes.

ICTSI said it is offering the notes in both the local and international capital markets to fund the company’s investments in existing and new terminal construction activities, refinance some of its existing debts and for other general corporate purposes.

The notes will mature 10 years from date of issue and will have a coupon rate of 7.375 percent per annum payable semi-annually.

The company has tapped Hongkong and Shanghai Banking Corp. (HSBC) and JP Morgan Securities as joint bookrunners and lead managers.

ICTSI’s group capital expenditure in 2010 is estimated at $123 million mainly for civil works, systems improvement, and purchase of major cargo handling equipment at its port operations in Manila (MICT), Brazil (TSSA), Ecuador (CGSA), and Madagascar (MICTSL).

The company earlier reported a 15-percent drop in its net income to $54.9 million in 2009, from $64.2 million in 2008, due to lower volumes and higher interest and depreciation expenses.

ICTSI officials explained that the lower volumes were brought about by the decline in global trade while the higher interest expense was due to higher debt levels.

Meanwhile, the increased depreciation expense was associated with continued investment in the company’s container handling capacities.

ICTSI chairman and president Enrique Razon Jr. noted that 2009 marked the first full year decline in global trade volumes since the end of World War II, and ICTSI’s annual results were affected by this difficult environment.

“We managed to control our costs well and limit the negative impact of volume declines, and the second half of the year was notably better than the first with the fourth quarter showing the first year-over-year growth in volumes since the third quarter of 2008,” he said.

Consolidated volume for 2009 was five percent lower at 3.56 million 20-foot equivalent units (TEUs) compared to 3.73 million TEUs in 2008.

Throughput from the company’s container terminal operations in Asia, comprised of the terminals in the Philippines, Indonesia, Japan, and China, increased three percent to 2.25 million TEUs in 2009 from 2.18 million TEUs in 2008.

ICTSI’s container terminal operations in Asia accounted for 63 percent of consolidated volumes for the year, compared to 58 percent in 2008.