SM Prime raises P5 B for expansion
MANILA, Philippines—SM Prime Holdings Inc. has raised P5 billion from the issuance of fixed-rate debt notes, generating long-term funds for expansion of its businesses in the Philippines and China.
In a disclosure to the Philippine Stock Exchange on Friday, the country’s largest shopping mall developer announced the completion of a fixed-rate debt issuance arranged by a syndicate consisting of Australia and New Zealand Banking Group Ltd., ING Bank N.V. and RCBC Capital Corp.
The issuance was for five-year, seven-year, and 10-year fixed-rate notes, proceeds from which will be used for general corporate requirements, the disclosure said.
Out of the total issuance, P3.7 billion consisted of 10-year debt paper carrying a fixed rate of 6.1 percent per annum, SM Prime chief finance officer Jeffrey Lim said in a text message.
The five-year fixed-rate notes were issued at 5.8 percent, Lim added.
The issuance of debt paper in various tenors was meant to spread out SM Prime’s debt maturities.
Raising funds through debt notes issued to selected institutional investors is a faster way of fund-raising compared to an offering of retail bonds, as the latter requires tedious registration requirements at the Securities and Exchange Commission.
Proceeds from the syndicated loan will help fund SM Prime’s P21 billion capital spending budget for this year. It was earlier announced that P12 billion of this budget will be invested locally while the remaining P9 billion will be used to increase the group’s presence in China.
SM Prime is now in talks with the Chinese government to build what will be its 8th shopping mall in China in Xinxiang located in the northern Henan Province. Lim said SM Prime was negotiating to buy a five-hectare property.
The group has four operating malls in China located in Xiamen, Jinjiang, Chengdu and Suzhou. It is constructing three more in Chongqing, Zibo and Tianjing.
SM Prime currently has 41 SM Supermalls in the Philippines with a total gross floor area of 5.0 million square meters..
This year, it is set to open new malls in five different locations namely, San Fernando in Pampanga, Olongapo in Zambales, Lanang in Davao, General Santos in South Cotabato, and Consolacion in Cebu. These will bring the number of SM Supermalls in the Philippines to 46 by yearend for a total floor area of 5.7 million square meters.
