International Hotel Investments plc - Details of New Bond Issue

On 1 July 2016, International Hotel Investments plc published a Prospectus in connection with the issuance of €55 million 4.0% secured bonds maturing in 2026. This bond is mainly earmarked to refinance bank borrowings on the Group’s property in Budapest (Hungary) which will subsequently be secured in favour of bondholders. Proceeds from this bond issue will also be used to part finance a number of the Group’s investments as detailed below.

IHI is reserving an amount of €30 million for its shareholders (preferred applicants) as at the close of trading on 27 June whilst the balance of €25 million is available for the general public.

The salient details of the new bond issue are as follows:



Amount Offered:

€55 million

Issue Price:

100% (par)

Interest Payment Date:

Annually on 29 July (first interest payment date is 29 July 2017)


The bonds will mature at 100% (par) on 29 July 2026.


The secured bonds shall be guaranteed, in respect of both the interest and the principal amount due, by the Guarantor, IHI Magyarország ZRT, a wholly-owned subsidiary of IHI which in turn owns the Corinthia Hotel Budapest. Furthermore, the hotel property in Budapest, valued at €146.25 million as per the independent property valuation report dated 17 June 2016, will be secured in favour of bondholders (through a Security Trustee).

Accordingly, the bonds shall constitute the general, direct, unconditional and secured obligations of the Guarantor and shall at all times rank with priority or preference over all indebtedness of the Guarantor present and future, if any (whether such indebtedness is secured or unsecured), over the secured property, but with no priority or preference over all other assets of the Guarantor.

In this respect, prospective investors are urged to read Sections 5.2 and 5.3 of the Securities Note on pages 16 and 17 as well as Annex III on pages 32 – 36.

Use of Proceeds:

The net proceeds from the Bond issue, estimated at €54 million after issuance costs, will be principally used by the Issuer for the following purposes:

(i) to refinance existing bank borrowings related to the Corinthia Hotel Budapest which will subsequently be secured in favour of bondholders (a maximum amount of €29 million);

(ii) to part finance the remaining balance of the consideration due on 10 August 2016 for the acquisition of Island Hotels Group Holdings plc (a maximum amount of €5 million); 

(iii) to fund the consideration due for the acquisition of the 80% shareholding in QPM (a maximum amount of €4.6 million); Subsequent to this acquisition, IHI will own 100% of QPM. Additional payments may be due by IHI if certain events in the pipeline materialise within set time periods.

(iv) to settle professional fees related to the St. George’s Bay Development (a maximum amount of €10 million);

(v) the remaining amount of circa €7.4 million will be used by IHI for general corporate funding purposes as well as for expenses incurred in relation to new development projects of the Group.

In the event the Issuer does not receive subscriptions for the full amount of €55 million, the Issuer will proceed with the listing of the Secured Bonds subscribed for and it shall apply the proceeds received in the order and priority set out above. The residual amount required by IHI in such a case will be financed from the Group’s general cash flow and/or bank financing.

Submission Deadline for Preferred Applicants:

Tuesday 19 July 2016 at 08:30 hours

General Public Offer Period:

Wednesday 20 July 2016 to Friday 22 July 2016

The offer period may close early due to oversubscription.

Minimum Application:

Applications for a minimum of €2,000 and in multiples of €100 thereafter.

Interested applicants are kindly requested to contact us for further information on the detailed application procedure.


Official List of the Malta Stock Exchange


The value of investments may increase as well as decrease and past performance is not an indication of future performance. Prospective investors are urged to read the Prospectus issued by International Hotel Investments plc dated 28 June 2016 including the Risk Factors which are found in the Registration Document on pages 9 to 15 and in Section 2 of the Securities Note found on pages 9 to 11. Prospective investors are urged to consult an independent financial adviser for advice prior to investing in the Bonds.


International Hotel Investments plc – Summary Note dated 28.06.2016

International Hotel Investments plc – Registration Document dated 28.06.2016

International Hotel Investments plc – Securities Note dated 28.06.2016

International Hotel Investments plc – Financial Analysis Summary dated 24.06.2016

This webpage has been prepared based on the Prospectus issued by International Hotel Investments plc, and no representations or guarantees are made by Rizzo, Farrugia & Co. (Stockbrokers) Ltd with regard to the accuracy of the data. This webpage is for information purposes only. It is not intended to be and should not be construed as an offer or solicitation to acquire or dispose of any of the securities or issues mentioned herein. Rizzo, Farrugia & Co. (Stockbrokers) Ltd accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this webpage.

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