SMC sets interest for P15-billion bond offer


Posted at Mar 20 2017 05:34 PM

Diversified conglomerate San Miguel Corp has set at 5.1923 per annum the interest rate for the planned 5-year bond offering worth P15 billion.

San Miguel in a disclosure to the stock exchange said offer period for the bond offering will be from March 21 to March 27.

The bonds will be listed with the Philippine Dealing & Exchange Corp on April 7.

San Miguel is issuing P10 billion worth of fixed rate bonds with an oversubscription of up to P5 billon. The bonds represent the second tranche of bond offering under its P60 billion shelf registration earlier approved by the Securities and Exchange Commission.

Proceeds from this bond offering will be used to settle the conglomerate's $300 million loan with the Bank of Tokyo-Mitsubishi UFJ, Ltd. maturing this November.

San Miguel has tapped BDO Capital & Investment Corp., BPI Capital Corp., ING Bank, RCBC Capital Corp., SB Capital Investment Corp., and Standard Chartered Bank.

It was only last February when San Miguel raised P20 billion to finance dollar-denominated debts.

It raised P6.9 billion for the series 5-year Series A Bonds due 2022 with an interest rate of 4.8243 percent per annum, P7.3 billion for the 7-year Series B Bonds due 2024 with interest rate of 5.2840 percent interest rate per annum and P6 billion for the 10-year Series C Bonds due 2027 with fixed interest rate of 5.7613 percent per annum. 

This latest bond offering was assigned an issue credit rating of PRS Aaa, with a Stable Outlook, by Philippine Rating Services Corp. (PhilRatings).

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. 

It is the highest rating assigned by PhilRatings.

In assigning the rating, PhilRatings considered the company's ample cash flow generation that is seen to strengthen further as the company's energy and infrastructure projects are completed and manageable and improving debt position, especially considering the capital-intensive nature of its recent projects in energy and infrastructure.

In 2016, San Miguel chalked up a net income of P52 billion, up 80 percent from P28.9 billion in 2015 as most of its units delivered strong growth.

Excluding foreign exchange losses of P8.9 billion, consolidated income reached P61.2 billion.

Net sales for 2016 went up by two percent to P685.3 billion versus P672.2 billion a year ago while income from operations rose 24 percent to P99.6 billion.