This article first appeared in The Edge Financial Daily on October 25, 2017
KUALA LUMPUR: Integrated aluminium product producer Press Metal Aluminium Holdings Bhd through its wholly-owned subsidiary, Press Metal (Labuan) Ltd, has successfully issued US dollar-denominated senior notes of US$400 million (RM1.7 billion).
The notes will be listed on the Labuan International Financial Exchange Inc and the Hong Kong Stock Exchange.
In a statement yesterday, Press Metal said this offering marks the country’s first high-yield US dollar issue in more than a decade.
“A US dollar-denominated instrument serves as a natural hedge to the group’s revenue which is primarily in US dollar.
“The strong response from global investors led to a final order book of over US$3.8 billion representing an oversubscription of 9.5 times over the final issuance size of US$400 million and resulted in a final pricing, which was 45 basis points lower than the initial price guidance of 5.25%,” it said.
The coupon rate on the five-year senior notes, which has a call option after three years, has been set at 4.80%.
The notes have been assigned ratings of Ba3 (stable) by Moody’s Investors Service Inc and BB- (positive) by Standard & Poor’s Ratings Services.
Meanwhile, group chief executive officer Tan Sri Koon Poh Keong said the proceeds from the notes will be used to refinance existing indebtedness and for general corporate purposes of the group.
Koon said this refinancing is prudent in view of the rising interest rate environment and to enhance the group’s financial position.
“We are very encouraged by the strong participation from global investors in our inaugural notes, which is a validation of a business that we have grown into the largest integrated aluminium producer in Southeast Asia.
“This successful offering represents an important milestone for Press Metal, demonstrating our ability to access the international debt capital markets and diversify our funding source,” he said.
The joint lead manager and joint lead book runners for the notes are Citigroup, Deutsche Bank, J P Morgan and Maybank.