KUALA LUMPUR: IOI Corp Bhd is hiring Citigroup Inc, HSBC Holdings Plc, Mitsubishi UFJ Securities Holdings Co and Morgan Stanley to arrange meetings with bond investors, Reuters reported.
StarBiz understands that there are at least two top management officials from the company who are in Singapore today attending a meeting with bankers and lawyers pertaining to this matter.
Reuters quoted an unnamed person as saying that meetings would be in Singapore today, Hong Kong tomorrow and in London on May 16 but details were private.
This bond meeting in Singapore confirms a report in StarBiz in February that IOI Corp was in talks with banks to raise more funds.
The funds raised should give IOI Corp sufficient money to not only pay for its Singapore land acquisition but some extra in the event it chooses to buy more assets such as plantation land.
These negotiations suggest that IOI is intent on continuing to tap liquidity from overseas bond investors and prefers to borrow in overseas denominated debt.
According to the company's second quarter financial results ended Dec 31, 2011, IOI had long-term and short-term borrowings amounting to RM5.06bil and RM604.41mil respectively.
A bulk of the palm oil planter's borrowings are denominated in foreign currencies such as the Singapore Dollar, Japanese Yen and the US Dollar. IOI also derives revenue from property development and investment.
Meanwhile, in a separate development, Standard & Poor's Ratings Services yesterday affirmed its BBB+ corporate credit rating on IOI with a stable outlook.
“We affirm the BBB+ issue rating on the company's guaranteed senior unsecured notes and our AXA+ ASEAN scale rating on IOI. We affirm the ratings because we expect IOI to maintain its steady operating performance over the next 12-18 months. Favourable crude palm oil prices and strong demand from China and India will underpin the company's performance,” S&P said in a statement issued to the press yesterday.
“We continue to assess IOI's business risk profile as satisfactory' and its financial risk profile as intermediate',” said Standard & Poor's credit analyst Wee Khim Loy in the statement.
By DANIEL KHOO, danielkhoo@thestar.com.my
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