SMC Global Power plans P15B bond offer

THE POWER generation arm of conglomerate San Miguel Corp. plans to raise up to P15 billion from an offering of retail bonds in multiple tenors.

SMC Global Power has filed a registration statement at the Securities and Exchange Commission, seeking authority to offer fixed rate bonds with five, seven and 10 year tenors.

Based on its registration statement, the company has mandated nine financial institutions as joint issue managers, joint lead underwriters and bookrunners for the transaction: BDO Capital & Investment Corp., BPI Capital Corp., Chinabank Capital, Maybank ATR Kim Eng, PNB Capital, RCBC Capital, SB Capital, Standard Chartered and UCPB.

Part of the proceeds from the issuance are meant to refinance short-term loan provided by BDO which were in turn used to redeem $300 million notes due this year.

The rest will be used for general corporate purposes such as overhead expenses, taxes and other operations-related expenses or payment of related transaction fees.

The bonds will be issued in scripless form in minimum denominations of P50,000 each and in multiples of P10,000 thereafter.

SMC Global will have the right but not the obligation to redeem in whole- and not in part- any series of the bonds. For the five-year bonds, redemption option will be three or four years from issue date. For the seven-year bonds, it will be five or six years from issue date. For the 10-year bonds, redemption option will be seven, eight or nine years from issue date.

The bonds will be redeemed at par or 100 percent of face value on their maturity dates, unless earlier redeemed by the company.

The group intends to list the bonds on fixed-income trading platform Philippine Dealing Exchange Corp. (PDEx).

SMC Global Power is one of the largest power companies in the Philippines controlling 2,903 megawatts of combined contracted capacity as of end-2015. It had a 17 percent market share of the power supply of the national grid and 22 percent of the Luzon grid as of end-2015.