SMC returns to int’l bond mart with record $800-M offer

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC) has generated $800 million from the largest issuance of dollar-denominated bonds by a Philippine company.

The offering, which highlighted anew the high liquidity in the international market, forms part of SMC’s $2-billion medium-term notes program.

“SMC staged a grand return to the international US dollar bond markets with an $800-million 10-year notes [with an interest of] 4.875 percent,” the company said in a disclosure to the Philippine Stock Exchange.

The conglomerate said it widened its funding sources as it completed the largest-ever dollar bond offering by a Philippine firm, which will support the company’s plan to pay existing debts.

“Final order book size was over $4.5 billion across 250 accounts, representing a strong oversubscription rate of 5.6 times,” SMC said.

Asian investors accounted for 69 percent or majority of the order book, followed by Europeans at 28 percent and US offshore investors at three percent.

Among the investors, 49 percent were private banks, 26 percent were asset managers, 12 percent were banks, six percent were insurance firms and seven percent were other companies.

“This offering marked SMC’s inaugural drawdown off its newly-established $2-billion medium-term notes program,” SMC said.

As of end-September last year, SMC had P237.874 million in current liabilities due in the next 12 months and P400.907 billion in long-term liabilities. Of these, P112 billion and P201.24 billion are short and long-term debts, respectively.

The food-to-power firm is currently on a five-year, $34.83-billion investment program that will make it the largest investor in the Philippines. The conglomerate said it will spend an average of P283.52 billion every year until 2017.

From its core brewery and food business, SMC has expanded into power production (SMC Global Power Corp.), downstream oil sector (Petron Corp.), packaging (San Miguel Yamamura Packaging Corp.), airline (Philippine Airlines) and several infrastructure projects like the Caticlan airport, Skyway and the NAIA Expressway.