This article first appeared in The Edge Financial Daily on January 31, 2019

KUALA LUMPUR: Genting Bhd’s subsidiary will issue bonds to raise US$775 million (RM3.18 billion) to prepay some existing debt facilities and for general corporate purposes.

In a filing with Bursa Malaysia yesterday, Genting said the guaranteed secured senior notes, with a coupon rate of 6.875% per annum and payable on a semi-annual basis, will be issued by its 57.89%-owned indirect subsidiary, LLPL Capital Pte Ltd.

The notes will have a tenure of 20 years and be unconditionally and irrevocably guaranteed by PT Lestari Banten Energi (the guarantor), which is its 55%-owned indirect unit, Genting said.

Genting said the book-building process and pricing of the notes were completed on Tuesday (Jan 29).

“The notes have been offered within the US only to qualified institutional buyers in reliance on the exemption from registration requirements of the US Securities Act 1933 provided by Rule 144A under the Securities Act and outside the US in offshore transactions in compliance with Regulation S under the Securities Act,” Genting said.

Moody’s Investors Service Pte Ltd has assigned a rating of ‘Baa3’ to the notes, while Fitch Ratings Ltd has assigned a rating of ‘BBB-’. Genting said the notes are expected to be listed on the Singapore Exchange Securities Trading Ltd on or around Feb 7.

Specifically, Genting said net proceeds from the note issuance will be used to fully prepay existing senior debt facilities of PT Lestari and pay costs for the termination of hedging arrangements applicable to these existing senior debt facilities.

They will also be used to fund the debt service reserve account and major maintenance reserve account, and general corporate purposes — which may include partial repayment of principal and accrued interest on shareholder loans granted to the guarantor.

Citigroup Global Markets Singapore Pte Ltd (Citigroup Singapore) is the sole financial adviser for the offering.

Together with Barclays Bank plc in Singapore, Citigroup Singapore is also the joint global coordinators for the offering. The two, as well as CIMB Bank Bhd in Labuan, are also the joint lead managers and joint bookrunners. SMBC Nikko Capital Markets Ltd is the offering’s co-manager.