SPH sets up $1b debt programme (ST)

BackFeb 23, 2010

SINGAPORE Press Holdings (SPH) has set up a debt programme with the capacity to raise up to $1 billion by selling notes - which are similar to bonds - to investors.

As a first step, SPH is looking to raise $300 million under the debt programme, which is one way of raising funds.

This facility, of a type used by many large companies, is called a multi-currency medium-term note programme.

It means that SPH will sell the notes to investors over a set term. The investors get paid interest at regular intervals.

The first series of notes, to raise $300 million, is being arranged by OCBC and matures in 2015. SPH has yet to announce the interest rate. Upon maturity, a company buys back the notes.

SPH said yesterday in its announcement to the Singapore Exchange that any funds raised would be used for general working capital, capital spending and requirements such as acquisitions or investments.

The funds could also be used to refinance existing borrowings, it added.

The programme allows SPH to issue notes in Singapore dollars or other currencies, in various amounts and tenors or durations, and at different rates of interest.

Many companies have set up such programmes in order to diversify their sources of funding in addition to using bank loans or tapping on shareholders.

Notes like these are usually held for a number of years by note-holders. The issuer uses them as a form of long-term financing, bankers say.

They add that it takes several months to set up such a programme given the documentation required, so companies sometimes set up the facility but may not use it to raise funds immediately.

Once the facility is in place, the company may raise different amounts at different points in time as the need arises.

Last November, SPH clinched the Clementi Mall, together with its joint venture partners NTUC FairPrice and NTUC Income, for $541.9 million.

SPH chief executive Alan Chan had told shareholders that SPH was pursuing opportunities in real estate as a way to guard against the ups and downs of the media business. SPH has already developed the residential property Sky@Eleven.

Last month, Asia Pacific Breweries raised $40 million in the second tranche of its $1 billion programme. Last year, it raised $100 million. It said it was using the proceeds for general corporate purposes, including the acquisition of several brands.

CapitaCommercial Trust has a $1 billion multi-currency medium-term programme which it has said was for refinancing short-term loans and for working capital.

SPH shares ended unchanged at $3.73 yesterday, with 2.1 million shares traded.