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SMIC sets rates for P10-B bond issue

Posted on June 20, 2012 10:51:03 PM [ BusinessWorld Online ]

SY-LED SM Investments Corp. (SMIC) has pegged the interest rates for its P10-billion bond offering set to be rolled out at the end of the month.

“SM Investments [yesterday] set the interest rates for its peso-denominated Series C, seven-year retail bonds at 6.0% per annum, and its Series D, 10-year retail bonds at 6.9442% per annum,” the holding firm said in a disclosure.

The bonds, which were approved by the Securities and Exchange Commission on June 6, were recently top-rated by Philippine Rating Services Corp., earning the local debt watcher’s outstanding PRS Aaa rating.

“A PRS Aaa rating denotes that such obligations are of the highest quality with minimal credit risk, and that the issuing company’s capacity to meet its financial commitment on the obligations is extremely strong,” SM Investments noted.

The bonds will be offered from June 27 to July 6 in minimum denominations of P20,000.00 each, and in multiples of P10,000.00 thereafter, with an issue date slated for July 16.

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.

With the overallotment option of P5 billion being exercised, SM Investments expects to bag P14.883 billion in net proceeds, the disclosure showed.

Proceeds will go to land banking initiatives as well as the construction of the 204-room Park Inn Davao by Radisson and other hotel projects.

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

The firm allotted a record P56.80-billion capital budget for this year -- a 20% increase from the year previous -- to fund expansions for its flagship mall and condominium development units SM Prime Holdings, Inc. and SM Development Corp. -- Franz Jonathan G. de la Fuente
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