Travellers International raises $300 million from bonds

MANILA, Philippines – Travellers International Hotel Group, a joint venture between tycoon Andrew Tan’s listed flagship firm Alliance Global Group Inc. (AGI) and casino-resort operator Genting Hong Kong Ltd., successfully debuted in the offshore debt market with a $300-million seven year bond issue that was heavily oversubscribed by investors scrambling for less risky assets.

In an interview, Lauro Baja III, managing director and chief representative to the Philippines of European investment bank UBS, said the bond issue was participated in by 88 investors and was four times oversubscribed, attracting $1.1 billion worth of bids.

The maiden bond issuance carried a coupon of 6.9 percent a year, the lowest rate achieved by a gaming company for an overseas debt with a maturity of more than five years.

UBS was the sole global coordinator and bookrunner along with Deutsche Bank.

Banco De Oro, on the other hand, was the domestic lead arranger.

Baja said 90 percent of the issuance was taken up by investors from Asia, including the Philippines, while the remaining 10 percent was sold to investors from Europe.

AGI president Kingson Sian said this was quite a feat for an unlisted company with just a little over a year in operations, adding that the bonds were unsecured and unrated.

An unsecured bond is backed up only by the promise that the issuer must honor the compromises of the bond issue.

Baja attributed the strong demand for the issue to AGI and Genting’s good credit profiles.

Aside from tourism, AGI is engaged in real estate development through its property arm Megaworld Corp., as well as in the fastfood and hard liquor businesses.