SMB sets rates for P20-billion bonds

MANILA, Philippines - San Miguel Brewery Inc. has set the coupon rates of its proposed issuance of P20 billion worth of five to 10-year bonds.

In a disclosure to the Philippine Stock Exchange yesterday, SMB said the interest rate was set at 6.05 percent for five-year plus one day bonds, 5.93 percent for seven year-bonds and 6.6 percent for 10-year bonds.

The issue was assigned a PRS Aaa rating by the Philippine Rating Services Corp.

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

SMB said it intends to use proceeds from the bond issue to refinance Series A of its outstanding P38.8-billion bond worth P13.59 billion which will mature on April 3, 2012, as well as a $300-million term facility.

In issuing the rating, PhilRatings took into consideration SMB’s dominant market position domestically, experienced management and production team, with technical support from shareholder Kirin Holdings, high cash from operations and profitability, sustained financial flexibility and adequate capitalization, and enhanced financial position in the medium term.

PhilRatings said the refinancing plan would allow SMB, which produces leading beer brands San Miguel Pale Pilsen, Red Horse and San Mig Light, to take advantage of current favorable market rates and extend maturities.