SMIC sets rate for $500-million bonds

MANILA, Philippines - SM Investments Corp. (SMIC) has set the minimum coupon rate for the new seven-year fixed rate bonds due 2017 at 5.2 percent per annum.

SMIC, the listed holding firm of the Sy family, has approved the issuance of up to $500 million fixed-rate dollar-denominated bonds to extend the maturity of some of its existing obligations.

The final coupon rate will be determined on Oct. 6, 2010 and will not be less than this level, subject to the terms of the exchange offers, SMIC said.

SMIC said the issuance of new seven-year fixed-rate bonds is pursuant to an invitation to bondholders to offer to exchange the company’s $350 million, 6.75 percent bonds due 2013 and $500 million six percent bonds due 2014.

The exhange offer begins on Sept. 2 and expires on Oct. 5 unless extended.

The determination of the timing of the transaction, pricing and other features of the new bonds will be finalized by the company together with Citigroup Global Markets Ltd. and the Hongkong & Shanghai Banking Corp. Ltd. as joint dealer managers, as well as BDO Capital & Investment Corp. as joint dealer manager and co-manager of the transaction.

The amount of the new bonds offered in exchange for each $1,000 outstanding principal amount of the existing bonds tendered and accepted for exchange will be determined based on the relevant exchange ratio, SMIC said.

SMIC last tapped the bond market in September 2009, raising $500 million from the issuance of five-year bonds to refinance debt.

In the first half of the year, SMIC posted net earnings of P8.5 billion, up 15 percent from the previous level, on strong growth across all its business units led by retailing, property development and banking. This prompted the holding firm to raise its full-year income growth target from 12 percent to 14 percent or around P18.5 billion.