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SMIC sets rates for P15-b bonds

By Jenniffer B. Austria | Apr. 29, 2014 at 12:01am [ ]

Conglomerate SM Investments Corp. on Monday set interest rates for the planned P15-billion bond sale at 5.2958 percent for the seven-year bonds and 5.6125 percent for the 10-year bonds.

SM Investments said in a disclosure to the stock exchange the company would issue a total of P10 billion, with an option to issue an additional amount of up to P5 billion.

The bonds are scheduled to be offered to public investors from April 30 to May 2 while the issue date will be on May 19.

BDO Capital & Investments Corp. is the issue manager and joint lead underwriter together with BPI Capital Corp., China Banking Corp. and First Metro Investments Corp.

“Proceeds of the bond sale shall be utilized by SM to refinance existing debt, including its series A retail bonds due 2014, to finance retention payments for the completed construction of a commercial buildings at SM Arena and to finance to construction of a warehouse building on its Asiana property in ParaƱaque City,” SM Investments said.

The bonds earlier received a PRS Aaa rating from Philippine Rating Services Corp., indicating 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 earmarked P80 billion in capital expenditures this year, up 23 percent from P65 billion in 2012, primarily to fund expansion of property, retail and banking businesses.

It said at least P70 billion would be spent by property arm SM Prime Holdings Inc., P5 billion to P6 billion for the retail expansion and the remaining P4 billion to P5 billion for banking subsidiaries BDO Unibank and China Banking Corp.

SM Investments posted an 11-percent increase in net income to P27.45 billion in 2013 from P24.67 billion in 2012, on strong earnings from banking, retail, mall and real estate businesses.

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