Rare international bond by Singaporean company

Singapore-owned and based International SOS has re-financed its bank borrowings through a private placement targeted at US investors.

Completed at the end of last week, the $78 million transaction was led by JP Morgan, with a four tranche structure. This comprised: one $28 million tranche of three year paper; a $7.5 million tranche of four year paper; a $20 million tranche of five year paper and; a $23 million tranche of 10 year paper.

Priced at par, the four tranches carry coupon levels ranging from roughly 8.5% to just over 9.5%, equating to launch spreads in the 275bp to 400bp range over Treasuries. About four to five investors were said to have participated in the transaction, which has an implied rating just above the investment grade threshold.

Accounts were said to have been attracted by the fact that the company is Singaporean, is unique and has a strong business model. Formerly known as AEA International, the company was re-named earlier this year after it acquired Geneva-based International SOS Assistance.

The company now ranks as the world's largest medical and emergency assistance concern, as well as a leading provider of remote site medical services. Most of its client base are said to be multinationals wishing to provide medical and technical support for employees living and working outside their home countries. International SOS is also well known for its emergency evacuations, recently coming to the aid of the hostages freed by Philippines Muslim extremists from the island of Jolo earlier this year, for example.

Asia presently contributes about 50% of the company's annual revenue, which in turn is expected to increase by 20% by the end of the current financial year. For the Financial Year ended June 30, turnover stood at $200 million. Over the next two years, the company has also said that it hopes to list on either Nasdaq or in Singapore.

The current funding exercise represents the first time that the company has borrowed overseas and was regarded as a more cost-effective means of re-financing and terming out debt than the domestic markets. Previously the company's debt profile averaged five years.

The transaction also adds to the growing tally of debt deals coming out of Singapore, which is now regarded as the saviour of beleagured international debt capital markets professionals in the region. Singapore Power launched what has come to be regarded as the first transaction by a wholly government-owned issuer in mid-April and has also been joined this year by the Development Bank of Singapore (DBS), with its second-ever international subordinated debt issue and the Port Authority of Singapore, which launched a debut international fundraising in July.

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