Pre-placement for IHI bond goes 'very well'

The pre-placement of International Hotel Investments plc's €30 million bond issue on Tuesday "went very well", managing director Joseph Fenech told The Times Business yesterday.

Mr Fenech said results garnered by HSBC and Bank of Valletta were "extremely encouraging", even as on the day documentation was still being distributed to Corinthia paper holders and stockbrokers were sending out mail shots.

The 10-year bond issue carries an annual interest rate of 6.25 per cent. There is an over-allotment option of a further €5 million in case of over-subscription. The bonds will be redeemable from 2015 onwards.

On Tuesday, applications opened for subscriptions of €2,500 or over to participate in the pre-placement which closes on June 26. Investors who hold bonds or shares in IHI plc, Corinthia Finance plc, or Mediterranean Investments Holding plc - the Corinthia Group subsidiaries have over 8,500 individual investors - are also entitled to participate in the pre-placement with applications for €1,000 and over. Both groups have been allocated €10 million of the issue each.

Over-subscription will automatically fall into the public offering which opens on June 30.

Mr Fenech said IHI is to manage the application process as efficiently as possible: should it reach €35 million, it will be closed soon afterwards.

This is the fourth bond issue by IHI, Corinthia Group's development arm. The newly-raised capital will be channelled towards the hotel chain's expansion plans. Two major hotels are under construction: the flagship 300-room Corinthia Hotel London and the 250-room Corinthia Hotel Benghazi. The chain currently boasts 22 luxury hotels in Malta and overseas.