MANILA, Philippines - Mall and banking conglomerate SM Investments Corp. (SMIC) is all set to return to the bond market after almost two years.
In a text message, Securities and Exchange commission Commissioner Ma. Juanita Cueto said the agency approved late Tuesday SMIC’s application to raise as much as P15 billion through bonds.
“The bonds will have a term of 10 years and seven years,” SMIC said in a disclosure.
The seven-year bonds will carry an interest rate between 4.7405 percent to 5.8405 percent per year, while the 10-year bonds will be priced between 5.4114 percent to 6.4114 percent per annum.
“The information regarding the interest rates and the timetable are all indicative as of this time,” SMIC said.
In February, SMIC’s board of directors approved the issuance of P10 billion worth of fixed-rate peso retail bonds, with an oversubscription option of up to P5 billion to cater to high demand.
The offer period for the seven- and 10-year bonds, which will help refinance maturing debt and fund various expansion projects, will run from April 30 to May 12.
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.
Net proceeds “shall be used primarily to refinance existing debt obligations of the issuer and to finance expansion projects,” SMIC said.
Specifically, the conglomerate allotted P9.458 billion for debt payment, P150 million for the SM Arena project and P310 million for the Asinan warehouse development in Parañaque.
The proposed bond issue received a PRS Aaa rating from Philippine Rating Services Corp.
“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,” PhilRatings earlier said.
The local credit rater said it took note of SMIC’s “solid financial profile backed by strong liquidity and a sound capital structure; clear growth strategy supported by solid brand equity; and core companies with very strong market positions, sustained earnings and recurring cash flows.”
SMIC is the investment holding company of the country’s richest man, Henry Sy Sr. 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.
Meanwhile, SM Foundation Inc., led by SMIC vice-chair Teresita Sy-Coson, signed on Tuesday a memorandum of agreement for the P20-million renovation of the Tacloban City Hospital.
“The Tacloban City Hospital caters to more than 130 barangays and averages a number of 100 patients per day, prior to Super Typhoon Yolanda making it a primal location for accessible health services,” said Connie Angeles, executive director for Health and Medical Programs of SM Foundation.
“The hospital is also far from the the ‘no-build zone’ listed by the Department of Environment and Natural Resources, making it a safe area to build this hospital,” Angeles said.
Aside from renovating the hospital’s main building and out-patient department, an additional Felicidad Wellness Center for Children and Elderly and a Malnutrition Ward will be constructed.