KIJA Successfully Executes Liability Management Exercise
PT Kawasan Industri Jababeka Tbk (“KIJA” or “the Company”) successfully completed its second liability management transaction comprising of an Exchange offer and Consent Solicitation exercise targeting its existing USD260 million 7.50% 144A/Reg S notes due 2019. In addition, the Company also successfully raised a concurrent new money amount of approximately USD21 million. Post the exchange offer and raising of new money, the final new 7 non-call 4 year notes due 2023 offering size will be USD186 million.
An overall participation rate of 84.9% was achieved for the Consent Solicitation exercise, representing one of the highest participation seen for recent Asian consent solicitation transactions while a participation rate of 63.6% was achieved for the Exchange Offer.
This transaction effectively enabled KIJA to reduce its overall funding cost, term out its debt maturity profile and loosen its USD bond covenants package providing the Company with greater operational and financing flexibility going forward.
The successful outcome of the Exchange Offer, Consent Solicitation and new money raising clearly reflects the significant improvements in KIJA’s credit story in recent years as well as the growing confidence that fixed income investors have in KIJA’s ability to execute and deliver value for its stakeholders. In particular, the high participation rate on the Exchange Offer and Consent Solicitation further underscores investors’ confidence in KIJA, evident from their willingness to extend duration by exchanging existing notes holdings into a new 7 non-call 4 year offering and remain invested in the Company’s credit.
The USD21 million new money raising saw robust demand from investors and was 6.3x oversubscribed on the back of USD130m in orders received from 21 accounts during an accelerated bookbuilding session of c. 2 hours. The new money allocation was well-balanced, with 50% going to investors in Asia while the remaining 50% were allocated to European accounts. Institutional participation was noteworthy, with 97% of the new money amount allocated to fund managers while the remaining 3% went to banks and private banking investors.
The Notes will be rated B+ by both S&P and Fitch respectively and proceeds from the new money component would primarily be used for general corporate purposes including payment of premium amounts in relation to the Exchange Offer and Consent Solicitation as well as transaction related expenses.
J.P. Morgan, Standard Chartered Bank and UBS acted as Joint Dealer Managers on the Exchange Offer and Consent Solicitation as well as Joint Lead Managers and Bookrunners on the new notes offering.