SMC bond issue to raise $500M

San Miguel Corp. (SMC), Southeast Asia’s largest food and beverage conglomerate, will likely raise $500 million from its US dollar-denominated perpetual bond issue.

The bonds, to be issued by wholly-owned offshore subsidiary San Miguel Capital Funding Ltd., have a call option after five years. Citigroup Global Markets Ltd., Credit Suisse Securities (Europe) Ltd., Deutsche Bank AG and HSBC Holdings are the joint bookrunners for the deal, which Moody’s Investors Service rated at Ba3, three notches below investment grade.

Proceeds of the offering will be lent to the parent company via a 30-year subordinated security, SMC said in a disclosure to the Philippine Stock Exchange.

The issue is expected to be priced soon after the investor presentations are completed on April 25. The promotional tour or roadshow will start in Manila today, before moving to Hong Kong and Singapore tomorrow, Zurich on April 24 and London on April 25.

SMC, which is 20 percent owned by Kirin Brewery Co. Ltd. of Japan, reported a 1.9-percent rise in 2005 net income to P9.03 billion from P8.86 billion a year earlier.

SMC said without one-off items related to its purchase last year of Australia’s largest dairy firm, National Foods Ltd., its net income in 2005 would have gone up eight percent from 2004.

The company recorded interest expense and financing charges of P11.82 billion last year against P3.61 billion in 2004, largely due to additional debt it incurred to fund the purchase of National Foods.