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SM Prime set to launch P25-b bonds

By Jenniffer B. Austria | Aug. 09, 2014 at 12:01am [ manilastandardtoday.com ]

SM Prime Holdings Inc., the largest property developer owned by tycoon Henry Sy, said Friday it will start selling P25 billion worth of bonds this month.

The company announced the plan after the Securities and Exchange Commission approved on Thursday the company’s maiden bond offering.

SM Prime executive vice president and chief finance officer Jeffrey Lim said the company would launch the bond offering this month, or as soon as it obtained regulatory approvals.

SM Prime is selling P15 billion worth of five, seven and 10-year fixed retail bonds with an oversubscription option for another P10 billion.

The five-year bonds carry interest rates of 4.5479 percent to 5.5479 percent per annum while the seven-year bonds will yield 4.8013 percent to 5.8013 percent.  The 10-year bonds will have interest rates of 5.1500 percent to 6.1500 percent.

Proceeds from the bond sale are expected to finance expansion of shopping malls, hotels, residential condominiums, office buildings, as well as tourism-related developments of SM Prime.

SM Prime tapped BDO Capital & Investment Corp., BPI Capital Corp., China Bank and First Metro Investment Corp. as joint lead underwriters for the offering.

The integrated property developer earlier said it would spend P400 billion in capital expenditures from 2014 to 2018, as it aims to double net income and revenues over the next five years.

Under the plan, SM Prime will increase its number of shopping malls to 85 by 2018, including 74 in the Philippines and 11 in China.

SM Prime said it also planned to nearly double its residential projects to 41 from the current 21, which would increase the number of condominium units to 140,000 from the present 64,000 units.

The property firm also aims to double its number of hotels to 10 from the current 5 to boost its hotel rooms to close to 2,000 rooms and double its lifestyle cities to eight from four.

It said the group’s shopping mall and residential businesses would continue to be major source of growth over the next five years.

The company said it would continue to grow its recurring income base over the long-term period through hotel, office and conventions businesses.

SM Prime allotted P71 billion in capital expenditures this year.
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