Press Metal Aluminium Holdings (Press Metal), South-East Asia’s largest aluminum producer, received a strong response from global investors for its US$400 mil five-year senior debt notes, which was 9.5 times oversubscribed and spread across a diverse group of investors. Moody’s Investors Service has rated the notes at Ba3 (stable) while Standard & Poor’s Ratings Services has rated it BB- (positive).

Oversubscribed

Press Metal’s US$400 mil (RM1.7 bil) debt notes received strong response from global investors and led to a final order book of over US$3.8 bil. In a statement released yesterday (24 Oct), Press Metal said, “The strong response from global investors represented an oversubscription of 9.5 times over the final issuance size of US$400 mil”.

Press Metal further stated that the allocation was spread across a diverse group of investors, comprising asset management companies and financial institutions across Asia and Europe, with participation from 240 accounts.

The coupon rate of the five-year senior notes, which has a call option after three years, was set at 4.8%. The notes will be issued by Press Metal’s wholly-owned subsidiary, Press Metal Labuan Ltd., and will be listed on the Labuan International Financial Exchange and the Stock Exchange of Hong Kong.

Latest Financial Results

Briefly, Press Metal’s latest financial results for the second quarter ended 30 Jun 2017 (2Q17) showed its core business profit increased by more than a third due to increased output and higher metal prices. Excluding the extraordinary gain of RM45.02 mil in 2Q16, its pre-tax profit showed a year-on-year growth of 35.8% to RM209.37 mil.

With proceeds from the notes going towards refinancing existing debts and for general corporate purposes, Press Metal will enjoy interest cost savings, in view that the US-dollar denominated instrument serves as a natural hedge to Press Metal group’s revenue, which is primarily in US dollars (the Star, 24 Oct).

Source: Macquarie Research - 25 Oct 2017