SM Prime’s bond issue gets SEC nod

SM Prime Holdings Inc., which serves as the flagship property arm of billionaire Henry Sy, has obtained regulatory approval to sell as much as P25 billion in fixed-rate bonds to partly finance its expansion plans through 2017.

Documents from the Securities and Exchange Commission (SEC) showed that SM Prime was planning to sell a minimum of P15 billion, with an option to increase the amount to P25 billion in case of high demand.

Sy-led BDO Capital and Investment Corp., one of four underwriters for the offer, could proceed with the bond sale once the SEC has given its approval, BDO Capital president Eduardo Francisco said in a text message Friday.

The bonds would be long-term, maturing from five years and six months, seven years and 10 years, respectively, for its so-called series “A”, “B” and “C” bonds, the filing showed.

SM Prime said the series “A” bonds would pay about 4.547 percent to 5.547 percent a year, the series “B” bonds would pay 4.801 percent to 5.8 percent, and series “C” bonds would pay 5.15 percent to 6.15 percent.

SM Prime, which earlier said it planned to spend about P70 billion in capital spending this year, said it expected to receive P14.86 billion in net proceeds from the bond sale without exercising an oversubscription option. With the option, the figure would rise to P24.78 billion, it said.

The funds will be used mainly for SM Prime’s shopping mall business, offices and hotels. Among its bigger projects is the SM City Seaside Cebu, which will have a gross floor area of 472,400 square meters. The project is scheduled to open in 2015.

The spending schedule also offers a look at the company’s upcoming office and hotel segment, where it has been aggressively expanding. SM Prime is planning to open five office buildings (four in Metro Manila an one in Iloilo) from 2014 to 2017.

For hotels, part of the funds would be used to open Conrad Hotel Manila by the end of next year and three more Park Inn Radisson hotels from 2015 to 2017, the filing showed.

SM Prime said this week that net profit in the first semester rose 12 percent year-on-year to P9.8 billion as rental revenues grew on new mall openings. Six-month consolidated revenues were up 7 percent year-on-year to P33.42 billion, it said.