SEC approves San Miguel, Aboitiz's bond programs

MANILA, Philippines — The Securities and Exchange Commission said Friday it approved the planned borrowing programs of two listed conglomerates: San Miguel Corp. and Aboitiz Equity Ventures Inc.

In a statement, corporate regulators said they have cleared San Miguel’s plan to sell up to P60 billion of fixed rate bonds and Aboitiz’s P30-billion bond offer.

The two companies would pursue their plans at a time of rising borrowing costs, as central banks around the world aggressively tighten monetary policy to fight stubbornly high inflation.

Under San Miguel’s bond program, the company will float P40 billion worth of debt papers consisting of Series L bonds due in 2028, Series M bonds due in 2029, and Series N bonds due in 2029.

The plan also includes an option to sell P20 billion more bonds if there would be strong investor demand for the offering.

Including the overallotment option, San Miguel could rake in up to P58.65 billion in net proceeds that the company would use to pay old debts it owed to onshore and offshore creditors.

Funding Cebu airport buyout

Meanwhile, Aboitiz’s P30-billion bond program that the SEC approved this year will be offered in tranches within three years.

For the first tranche, the listed conglomerate will offer P550 million. This will be issued alongside the P7.45-billion bond program previously approved in 2019, which will serve as the fourth and final tranche of the old debt plan.

The company will likewise offer up to P12 billion of bonds from the 2022 program as part of the oversubscription option.

Overall, Aboitiz could raise up to P19.76 billion from the bonds sale, which the company will use to partially finance the acquisition of GMR-Megawide Cebu Airport Corporation by its wholly-owned subsidiary Aboitiz InfraCapital.

A portion of the proceeds will also go to paying old company debts that a falling due soon. — Ian Nicolas Cigaral