SMIC gears up for first tranche of $3 billion EMTN

MANILA, Philippines — SM Investments Corp. (SMIC), the investment holding company of the Sy family, is set to foray in the offshore debt market to raise funds to finance continued growth and expansion.

In a stock exchange filing, SMIC said it has mandated several banks to arrange a series of fixed income investor meetings in Asia and Europe starting on July 16, 2024.

“A dollar-denominated benchmark-sized Regulation S offering of five-year senior notes by SMIC SG Holdings Pte. Ltd. (the issuer) guaranteed by SMIC may follow, subject to market conditions,” the company said.

SMIC said the notes would be drawn from the issuer’s $3 billion euro medium term note (EMTN) program.

HSBC, JP Morgan, Standard Chartered Bank and UBS were mandated as joint lead managers and joint bookrunners, while BDO Capital and Chinabank Capital were tapped as joint lead managers.

SyCip Salazar Hernandez & Gatmaitan for Philippine law and Latham & Watkins LLP for English law are the legal advisers of the issuer and guarantor.

Legal advisors of the joint lead managers and joint bookrunners, meanwhile, are Picazo Buyco Tan Fider & Santos Offices for Philippine law and Linklaters Singapore Pte. Ltd. for English law.

Last May, SMIC and SM Prime Holdings Inc. announced the establishment of a $3 billion multi-issuer EMTN program.

Jointly established by SM Investment Corp.’s wholly owned subsidiary SMIC SG Holdings Pte. Ltd. and SM Prime’s SMPHI SG Holdings Pte. Ltd., the EMTN program will allow the companies to tap the offshore bond market to fund its continued growth and expansion.

For this year, SMIC is allocating around P110 billion to P115 billion in capital expenditures for the continuing expansion of its various businesses.

The biggest component of the capex is integrated property developer SM Prime, which is looking at P100 billion capital spending to support various programs.

After raising P25 billion from an oversubscribed bond offering last month, SM Prime chief finance officer John Nai Peng Ong earlier told The STAR that the company is still considering additional fundraising activities this year for its capex requirements.

“The EMTN program is an added option for funding so we do not limit ourselves to local. We also have foreign funding options in which the EMTN is a foreign option. So we’ll look at whether to tap the local (market) or we can also look at other options like EMTN. It can be whether second half (this year) or early next year,” Ong previously said.