SMIC sets coupon rate for 7-yr bonds

MANILA, Philippines - SM Investments Corp. has set the coupon rate for its seven-year bonds at 5.159 percent per annum.

SMIC is offering up to P20 billion in bonds, comprised of a base offer of P15 billion and an oversubscription option of P5 billion.

 In a disclosure to the Philippine Stock Exchange (PSE) yesterday, SMIC said it would offer the bonds to investors until Dec. 2, 2016 while the listing of the bonds is on Dec. 9, 2016.

The offering marks SMIC’s fourth peso-denominated retail bond issue.

The bond issue was assigned a rating of  PRS Aaa from the Philippine Rating Services Corp.

A rating of PRS Aaa is the highest rating assigned by PhilRatings, and is assigned to long-term debt securities with the smallest degree of investment risk. This rating denotes SMIC’s extremely strong capacity to meet its financial commitment.

Lead joint issue managers are BDO Capital & Investment Corp. and China Bank Capital Corp. together with BPI Capital Corp. and First Metro Investment Corp. as joint underwriters and bookrunners.

SB Capital Investment Corp. is a co-lead underwriter for the bond issue.

Net proceeds from the issue are estimated at P19.8 billion which includes an oversubscription option of P5 billion and which would be disbursed with in the fourth quarter of 2016 or up to the end of the second quarter of 2017.

Of the P15 billion, P6.15 billion would be used for debt refinancing while P8.72 billion would be allocated for investments and acquisitions, SMIC said in its registration statement.

If the oversubscription option of P5 billion is utilized, an additional P4.96 billion would be used for the company’s strategic investments.

The move is part of the company’s strategy to maintain its leading market share in retail and property business segments by diversifying and expanding the businesses of the group.

SMIC is one of the leading conglomerates in the Philippines with businesses in retail, banking and property development.

Its retail operations have a strong brand franchise portfolio consisting of The SM Store, toy Kingdom, Watsons, SM Supermarket, SM Hypermarket, Savemore and WalterMart stores.

Property arm SM Prime Holdings, meanwhile, is one of the largest integrated property developers in the Philippines with interests in mall, residential, commercial and tourism development.