MANILA, Philippines - Integrated property giant, SM Prime Holdings Inc. is set to issue up to P20 billion in fixed rate retail bonds.
In a disclosure to the Philippine Stock Exchange (PSE) Friday, SM Prime said its board of directors had approved the issuance of fixed rate retail bonds up to P15 billion, with an oversubscription option of up to P5 billion.
The bonds will have maturities of 5.25 years and 10 years, the company also said in its disclosure.
“The board of directors also authorized the management to negotiate and finalize the terms and conditions, including pricing, tenor and any increase in issuance amount, and execute any and all documents necessary, to implement the retail bond issue,” the disclosure said.
In August, SM Prime executive vice president Jeffrey Lim said the company might consider raising funds before the US Federal Reserve raises rates and before next year’s presidential elections.
“We’re working on the 2016 plan and we might consider raising before the possible rate hike. We’re still working on requirements. On the second half, we might need to raise about P12 billion towards the latter part of the year. We have not decided yet. It could be retail bonds or bilaterals depending on the cost and alternatives presented,” Lim said.
On Thursday, the US Fed decided to keep rates steady, contrary to expectations of analysts that the US central bank would finally raise rates.
Fed chair Janet Yellen was quoted as saying the outlook abroad has appeared to become less certain, adding that recent falls in US stock prices and a rise in the value of the dollar already were tightening US financial market conditions.
She said she wanted to see more improvement in the US labour market and expressed concern over weak inflation.
SM Prime has reported a 90 percent increase in its consolidated net income in the first half of the year, driven by rental revenues and new projects of its real estate business.
Net income rose to P18.7 billion during the period from P9.8 billion in the same period last year.
Excluding one-time trading gains on the sale of marketable securities, SM Prime’s recurring income grew by 15 percent to P11.2 billion, the company said.
Proceeds of the fund-raising activity would be used for general funding requirements as the company gears up for more expansion.
SM Prime currently operates 50 shopping centers around the country and eventually hopes to bring this to 100 malls.
Aside from its Philippine malls, the company also operates five malls in China, with plans to grow its China malls to nine by 2018.