SM Prime prices for P20-B bonds

MANILA, Philippines - Property giant SM Prime Holdings Inc. has set the interest rates for its retail bond offering worth up to P20 billion.

In a press statement SM Prime said the five-year Series D bonds were priced to yield at 4.5095 percent per annum while the 10-year bonds would yield 4.799 percent per annum.

The bonds will be offered to retail investors until Nov. 13.

SM Prime will issue an aggregate P15 billion worth of bonds with an option to upsize by up to P5 billion.

Proceeds from the bond offering will mostly be used for the continued expansion of its shopping mall operations and loan refinancing.

By the end of the year, SM Prime will increase its mall network to 55 in the Philippines with a gross floor area of 7.3 million square meters.

In 2016, the company will open six new malls and expand two existing ones. Combined, the additional mall space would reach 571,631 sqm.

“The retail bonds to be issued by SM Prime will largely support funding for our mall expansion programs in the coming years. This is a testament to management’s confidence that the economic growth of the Philippines will be sustained over the medium term and will eventually have a positive impact on the provinces as growth spreads to these areas,” SM Prime president Hans Sy said.

This series of SM Prime bonds due 2021 and 2025 is the second offering of peso-denominated retail bonds to the public, subsequent to its successful maiden bond issue worth P20.0 billion in 2014.

Similar to its previous bond issue, the SM Prime Series D and Series E retail bonds have been rated PRS Aaa – the highest rating given by local credit watcher Philippine Rating Services Corp.

A rating of PRS Aaa is assigned to long-term debt securities with the smallest degree of investment risk. It means SM Prime’s repayment capacity is extremely strong.

The bonds’ joint issue managers and joint bookrunners are BDO Capital & Investment Corp., China Banking Corp., and First Metro Investment Corp., which are also acting as joint lead underwriters together with BPI Capital Corp., PNB Capital and Investment Corp., United Coconut Planters Bank, SB Capital Investment Corp., East West Banking Corp., RCBC Capital Corp., Land Bank of the Philippines and Philippine Commercial Capital Inc.

SM Prime said it remains committed to its role as a catalyst for economic growth, delivering innovative and sustainable lifestyle cities, thereby enriching the quality of life of millions of people.