SMC eyes P20 billion fixed bond offer

MANILA, Philippines —Diversified conglomerate San Miguel Corp. (SMC) targets to offer in June fixed-rate bonds in a bid to raise P20 billion.

The offer will be comprised of 6.5-year fixed rate Series O bonds due 2030 and 10-year fixed rate Series P bonds due 2034.

With an aggregate issue size of up to P20 billion, the offer consists of a base offer of P15 billion and an oversubscription option of up to P5 billion.

Based on SMC’s indicative timetable, the public offer period of the bonds is eyed from June 17 to June 21.

Issue and listing date on the Philippine Dealing and Exchange Corp. is targeted on June 28.

SMC said net proceeds of the offer would be used for investments in Manila International Airport (MIA)  and other airport-related projects in Bulakan, Bulacan and/or redemption of Series I bonds as a result of the put option exercise of its bondholders, and repayment of Series F Bonds.

Up to P17.56 billion of the net proceeds of the offer are being allocated to invest in the MIA and other airport-related projects, and/or to partly fund the redemption of the Series I bonds.

Meanwhile, up to P2.44 billion will be used for the repayment of the company’s Series F bonds issued on March 19, 2018 with annual interest rate of 6.625 percent, maturing on March 19, 2025.

SMC said the repayment of Series F bonds will be made on March 19, 2025.

The offer bonds have been rated PRS Aaa with a Stable Outlook by the Philippine Rating Services Corp.

PRS Aaa is the highest rating assigned by PhilRatings.

The issuance will come from the remainder of SMC’s existing P50 billion Securities and Exchange Commission (SEC) shelf-registered peso-denominated bonds.

In 2021, SMC raised P30 billion from the first tranche of its SEC-approved P50-billion shelf program.

The P30 billion fixed rate bonds series I due 2027, with a put option in 2024, carries an interest rate of 3.3832 percent per annum.

Proceeds were allocated by SMC for the company’s general funding requirements.