Fullerton Health has returned to the bond markets again, this time with a US$175 million (S$244 million) perpetual bond offering.
The deal was well oversubscribed and saw more than US$525 million of orders, led by institutional investors, which received 65 per cent of the final allocations, and private banks, which received 35 per cent. The final deal involved 82 investors, 95 per cent of whom were based in Asia and the rest in Europe.
The senior unsecured debt has a distribution rate of 7 per cent a year up to the first call date of 2020.
After that, the distribution rate resets every three years to a rate equal to the prevailing three-year United States Treasury rate plus the initial spread plus 5 percentage points.[/•]
Credit Suisse was the sole lead manager for the unrated issue.
Fullerton Health is a managed care provider that aims to control healthcare costs for insurers and corporates by weeding out inefficient practices.
It is returning to the bond markets soon after raising $100 million in Singdollar bond offerings last June, and after plans for an initial public offering (IPO) were shelved last November.
SPEEDING UP GROWTH
There was appetite in the market for a debt issue of this kind, which gives us the opportunity to accelerate our growth plans.
GROUP CHIEF FINANCIAL OFFICER RAMESH RAJENTHERAN
Group chief financial officer Ramesh Rajentheran said: "There was appetite in the market for a debt issue of this kind, which gives us the opportunity to accelerate our growth plans."
While last year's bond issuance has been spent on refinancing bank debt, the proceeds of the latest issuance will help Fullerton continue on its aggressive acquisition trail.
Fullerton is eyeing acquisitions in the speciality services segment in Singapore, and in the enterprise healthcare services segment in Australia, Mr Rajentheran said.
The company set aside plans for an IPO last November amid anonymous complaints to the regulators over its business model.
According to its preliminary prospectus, Fullerton had sought to raise $213 million, which would have valued the company at $1.13 billion.
The complaints centred largely on how the firm takes a 15 per cent cut of doctors' fees under its managed care services.
Fullerton "has no current plan for an IPO", Mr Rajentheran said.
"We will, of course, continue to consider and evaluate the full range of funding options, which may include an IPO at some point in the future, and we retain the option to IPO on any one of several major exchanges.
"At the moment, we are focused on growing our business and delivering on our mission to deliver high-quality affordable healthcare to as many people as possible."