MANILA, Philippines – Mall and banking conglomerate SM Investments Corp. (SMIC) has finalized the pricing of its P15 billion debt papers, marking the company’s return to the bond market after almost two years.
Proceeds from the fundraising program will be used to pay existing debts finance expansion projects like the construction of a new warehouse, the conglomerate said in a disclosure.
SMIC said it set the interest rates for its peso-denominated Series E, seven-year retail bonds at 5.2958 percent per annum. The Series F, 10-year retail bonds were priced at 5.6125 percent per annum.
The investment firm of Henry Sy Sr. will issue an aggregate principal amount of P10 billion of the Series E and Series F bonds, with an option to issue an additional amount of up to P5 billion to cater to strong demand.
Offer period will run from April 30 to May 12 prior to listing in the fixed income trading platform Philippine Dealing and Exchange Corp.
“Proceeds of the bonds shall be utilized by SMIC to refinance existing debt, including its Series A retail bonds due June 2014,” the company said.
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It will also fund the “retention payments for the completed construction of a commercial building at the SM Arena-Mall of Asia Complex, and finance the construction of a warehouse building on its Asinan property in Parañaque City,” SMIC added.
SMIC hired BDO Capital & Investment Corp. as the issue manager. It is also acting as joint lead underwriter together with BPI Capital Corp., China Banking Corp. and First Metro Investment Corp.
The new SMIC bonds are rated PRS Aaa by Philippine Rating Services Corp., carrying a top score similar to the firm’s two previous peso-denominated retail bond issues in 2009 and 2012.
The last time SMIC tapped the debt market was in June 2012 when it raised P15 billion through the sale of peso-denominated fixed-rate bonds maturing in seven and 10 years.
SMIC is the holding company of country’s richest man Henry Sy. It is into shopping malls and property development (SM Prime Holdings Inc.), retail (SM Retail Inc.) financial services (BDO Unibank Inc. and China Banking Corp.), and hotels and conventions (SM Hotels and Conventions Corp.).
Its earnings climbed 11 percent to P27.45 billion in 2013 from P24.67 billion a year ago while revenues jumped 13 percent to P253.5 billion from P223.9 billion in 2012.
