HPH Trust – BT

HPH Trust to price IPO at US$1.01, rake in US$5.5b

The IPO ranks as the biggest worldwide so far this year: Dealogic

Hutchison Port Holdings Trust (HPH Trust) will be raising some US$5.5 billion from its initial public offering (IPO) in Singapore after pricing its units at US$1.01 apiece – a level in line with that cited by reports earlier.

According to data provider Dealogic, the IPO is the largest globally so far this year, and has boosted the IPO volume on Singapore Exchange (SGX) to more than 17 times that seen in the same period last year.

HPH Trust settled on the offer price yesterday, days after Reuters said that the trust had narrowed the price range amid growing investor caution. That range was reportedly shrunk to US$0.99- US$1.03, from US$0.91- US$1.08.

The offer price of US$1.01 lies right in the middle of the new range. Investors applying for units under the public offer will pay the Singapore-dollar equivalent of S$1.294 per unit. Trading of the units on SGX is expected to start on Friday.

There will be around 3.8 billion units under the global offering, and another 1.6 billion units for cornerstone investors.

The pricing of HPH Trust units has come under close scrutiny, with the market watching it for signs of how investment sentiment has been holding up.

Continuing political upheaval in the Middle East coupled with Japan’s deadly earthquake rattled Singapore’s stock market yesterday, causing the Straits Times Index to slide 12.63 points to 3,030.86.

The market will be a little ‘sceptical’, seeing that HPH Trust could not price its units at the higher end of the range, said Sias Research vice-president Roger Tan. They might ask if ‘the macro factors have affected the take-up rate’, he reckoned.

There is, nevertheless, some cause for cheer. Dealogic said yesterday that HPH Trust’s listing brought the IPO volume on SGX so far this year to US$5.55 billion. This is 17.8 times that of the US$311 million raised in the same period last year.

In fact, this year’s IPO volume is pushing close to that for the whole of 2010, which was US$5.63 billion.

Goldman Sachs, Deutsche Bank and DBS – joint bookrunners, lead managers and issue managers for the HPH Trust IPO – are now ranked first, second and fourth respectively in Dealogic’s Asia ex-Japan equity capital markets league table.

Net cash proceeds from HPH Trust’s listing will go towards cutting Hutchison Whampoa Ltd’s (HWL) net debt to net total capital ratio to around 20 per cent this year.

HPH Trust will hold port assets in Hong Kong and Shenzhen, China. It is sponsored by Hutchison Port Holdings, a subsidiary of HWL.