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SMIC gets approval for P10-B bond issue

Posted on June 08, 2012 07:19:24 PM [ BusinessWorld Online ]

SM INVESTMENTS Corp. has earned regulators' approval to issue P10 billion worth of bonds to bankroll hotel and office projects until 2016, a filing with the Securities and Exchange Commission (SEC) showed on Friday.
 
Following an en banc meeting late Thursday, the commission approved SM Investments' issuance of new fixed-rate bonds with an oversubscription option of P5 billion, the document dated June 6 stated.

The bonds, with tenors of five or seven years, have respective interest rates of 6.2115% and 6.9750% per annum and are being distributed in minimum denominations of P20,000, and in multiples of P10,000 thereafter.

The bond offering began on June 4, and will run until June 14 with an issue date slated for June 21.

BDO Capital & Investment Corp., BPI Capital Corp., China Banking Corp., and First Metro Investment Corp. will be serving as joint lead underwriters for the bond offer.

Including overallotment gains, SM Investments expects to bag P14.883 billion in net proceeds, with a bulk intended to fund land banking initiatives, and the rest going to the construction of the 204-room Park Inn Davao by Radisson and planned hotel projects in Metro Manila, Batangas, and Pampanga.

Part of the proceeds will also be allocated for the construction of various office buildings under unit SM Land, Inc.

This comes on top of earlier bond issuances. In February, the company announced the distribution of five-year convertible bonds with a coupon rate of 1.625%. Last April, SM Investments moved to issue P10 billion worth of fixed-rate peso retail bonds, to be offered in 10- and 15-year tranches.

The firm allotted a record P56.80 billion capital expenditure this year--a 20% increase from 2011 levels. Around P30 billion will be spent for residential and commercial property projects, while more than P20 billion will be directed toward new SM mall expansions both at home and in China, SM Investments had said.

For the first quarter, SM Investments realized a net income of P6.04 billion, 12.48% up from yearago levels, driven by its core banking, retail, real estate, and mall development businesses.

SM Investments shares were traded unchanged on Friday at P685.00 apiece. -- Franz Jonathan G. de la Fuente
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