Milbank Acts on Two Philippine Perpetual Capital Securities Offerings

The international law firm Milbank, Tweed, Hadley & McCloy LLP recently advised on two significant international capital markets transactions in the Philippines involving International Container Terminal Services, Inc. (ICTSI) and SMC Global Power Holdings Corp. (SMC Global Power). The two transactions, both completed in August, raised a total of US$750 million, signifying the country’s continuing strong position in the global capital markets despite recent challenging market conditions.

ICTSI – Milbank acted as sole international counsel on the successful issuance of US$450 million senior perpetual capital securities by ICTSI, one of the largest port operators in the world, with a total of 30 common user container terminals located in 20 countries globally. Citi, Credit Suisse and Standard Chartered Bank acted as joint lead managers. The new perpetual securities confer a right to receive distributions at a rate of 5.50% per annum, were priced at par and mark the lowest coupon for a Philippine corporate issuer of perpetual securities.

SMC Global Power – Milbank advised a consortium of eight joint lead managers including Australia and New Zealand Banking Group Limited, Bank of America Merrill Lynch, DBS, Deutsche Bank, HSBC, ING, Mizuho and UBS, on the US$300 million offer of undated subordinated capital securities by SMC Global Power, the power arm of San Miguel Corp., one of the Philippines’ largest conglomerates. The SMC Global Power Securities confer a right to receive distributions at a rate of 6.750% per annum, were priced at par, and will be redeemable on February 26, 2021 and any semi-annual distribution payment date thereafter. The proceeds from the transaction will be used to finance SMC Global Power’s investments in power-related assets. The transaction also resulted in a lower coupon from SMC Global Power’s debut issuance of perpetual securities in May of 2014.

Global Securities Partner James Grandolfo commented, “We are extremely pleased to have been able to assist on these two important Philippine capital market transactions. The success of these deals indicates continued keen investor interest not only in ICTSI and SMC Global Power but in the Philippine investment story. To be able to price two relatively large transactions in the space of one week during such volatile market conditions speaks volumes as to the resiliency of the Philippine capital markets.”

The Milbank team for both transactions was led by partner James Grandolfo and counsel Paul Pery, with support from associates Adam Heyd and York Wu.

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