SMC raises $800M from sale of bonds

San Miguel Corp. has raised $800 million from a 10-year overseas bond sale, setting a new record as the biggest US dollar-denominated corporate bond issue out of the Philippines.

The bonds were priced at 4.875 percent a year. SMC, one of the largest and most diversified conglomerates in the country, has the option to redeem the bonds starting on the fifth year.

In a disclosure to the Philippine Stock Exchange, SMC said its return to the overseas bond market was warmly received by the market, allowing the issuer to reduce its borrowing cost from the initial guidance rate of 5.125 percent a year.

Final order book amounted to $4.5 billion from 250 accounts. The issuance was oversubscribed by 5.6 times the base offer size, SMC said. The conglomerate said it generated the “overwhelming” demand by “executing a well-planned marketing strategy that included an expedited roadshow covering Singapore and Hong Kong, as well as by identifying an opportune pricing window.”

Asian investors took up majority of the bond deal, accounting for 69 percent. Europeans accounted for 28 percent and the remaining 3 percent was taken up by US offshore investors.

By investor type, 49 percent was bought by private banks, 26 percent by asset managers, 12 percent by banks, 6 percent by insurance firms and 7 percent by other corporations.

The offering marked SMC’s inaugural drawdown of its newly established $2-billion euro medium-term notes (EMTN) program. ANZ and Standard Chartered Bank were the joint arrangers of the EMTN program. ANZ, BofA Merrill Lynch, DBS Bank, Deutsche Bank and Stanchard Chartered Bank acted as joint lead managers and joint bookrunners for the transaction.