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Business

SM Investments to issue $500-million bonds

- Zinnia B. Dela Peña -

MANILA, Philippines - SM Investments Corp. (SMIC), the listed investment holding firm of the Sy family, has approved the issuance of fixed-rate dollar denominated bonds worth up to $500 million.

In a disclosure to the Philippine Stock Exchange, SMIC said it has tapped Barclays Capital and Citigroup as lead underwriters for the offering slated this month.

Sources said the company has an option to increase the issue size depending on investor demand and market conditions. 

In a phone interview, SMIC chief finance officer Jose T. Sio said the terms and conditions as well as the features of the bonds are still under study and are expected to be finalized soon. “We hope to complete everything very soon as we plan to do the offering this month,” he said.

SMIC will use the proceeds from the bond issue to fund general corporate purposes including refinancing of existing debt obligations.

In June, SMIC successfully raised P10 billion from a local bond offering.

SMIC is engaged in four primary businesses: commercial centers (shopping mall development); retail and merchandising through its department stores, supermarkets, hypermarkets and wholesale operations; financial services; and real estate development and tourism. 

The company enjoys a dominant position in the department stores and hypermarket sectors, and is one of the top players in the supermarkets category.

With its strong cash flow and debt-free operations, SMIC’s retail business is considered as the group’s cash cow. Dividend income in 2008 from the group’s retail subsidiaries amounted to P3.1 billion, accounting for 55 percent of SMIC’s dividend income for the year.

Meanwhile, SMIC’s property arm, SM Development Corp., will undertake a stock rights offering amounting to as much as P5 billion to fund its landbanking activities and cover other working capital requirements.

The company has appointed BDO Capital & Investment Corp. as its underwriter for the rights issue.

SMDC has earmarked P7.2 billion for its capital expenditures this year or 40 percent higher than the allotted budget in 2008. Around 80 percent of the budget will be sourced from internally generated cash while the remaining 20 percent will come from borrowings.

The company continues to beef up its landbank to ensure continued growth and further strengthen its hold in the real estate industry.

Among SMDC’s new projects include  Princeton Residences, Sun Residences (near Welcome Rotonda in Quezon City); Mars Residences along Jupiter St. in Makati City; Jazz Residences in Mandaluyong City; Tree Residences along Felix Ave. in Cainta, Rizal; and Wind Residences in Tagaytay City.

Princeton Residences, a 37-storey condominium buildingy along Gilmore St., Quezon City, is estimated to cost P1.5 billion. Construction will start this year and is slated for completion in 2012. A total of 1,088 units will be offered to the public.

Tree Residences, on the other hand, will involve the development of eight 12-storey mid-rise buildings, costing around P2 billion.  The project, offering a total of 2,420 units, will rise on a 5.4 hectare property on Imelda Ave. in Cainta, Rizal and is targeted for completion in 2012.

Wind Residences, meanwhile, is expected to cost P4.3 billion and will make available a total of 2,300 units. Completion of the project is set for 2015.

Ongoing projects include Chateau Elysee, Berkeley Residences in Katipunan Road across Miriam College and Grass Residences beside SM North Edsa.

vuukle comment

BARCLAYS CAPITAL AND CITIGROUP

BERKELEY RESIDENCES

BILLION

CAINTA

CHATEAU ELYSEE

PRINCETON RESIDENCES

QUEZON CITY

RESIDENCES

SMIC

TREE RESIDENCES

WIND RESIDENCES

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