The $4.4 billion acquisition financing is to be funded through a combination of a $3.42 billion term loan and bond offering estimated to be worth around $1 billion.
Morgan Stanley represented PSA on the purchase and later, along with the Royal Bank of Scotland, provided a $1.8 billion bridging loan.
Given that Morgan Stanley underwrote the bridge loan it was always reckoned to be in the driverÆs seat when it came to winning the hotly contested bond mandate. However, the respective success of the loan facility had also seen the loan's underwriters clamouring for a share of the bond deal as well.
Last week, PSA signed the loan facility, which was worth $3.42 billion-equivalent via leads Barclays, DBS and RBS. That represented an increase of almost $800 million over its initial size of $2.6 billion and reduced the funding requirement needed from the bond facility - whose initial deal size had been rumoured to be worth upwards of $1.8 billion.
Roadshows will kick-off on Thursday in Singapore and Friday in Hong Kong before splitting into two teams to meet investors in the US and Europe next week. Upon the conclusion of the roadshow schedule, the issuer will address investor feedback and market conditions before determining the deals prospective structure.
In combination, Hutchison Port and PSA handle over 90 million twenty-foot equivalent units (TEUÆs), the mainstay of the shipping industry, a quarter of all cargo shipping worldwide.
In its biggest single investment ever, the Singapore port operator, the worldÆs second largest port operator behind Hutch purchased a 20% stake in Hutchison WhampoaÆs (HWL) portfolio of ports - Hutchison Port Holdings and Hutchison Ports Investments Sarl - for a total cash consideration of $4.4 billion.
The deal gives PSA a 20% stake in all HWLÆs 42 global port assets. The purchase increases PSAÆs stake in Hong Kong International Terminals to just over 30% and it also acquires interest in Yantian, GuangdongÆs primary deep-water port, and the second phase of ShanghaiÆs Yangshan project.
The sale and purchase agreement was signed on April 21, 2006 and the transaction was completed in mid-May.
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