SMC Global Power raises $300M from offshore perpetual bond offer

SMC GLOBAL Power, a power generation firm under conglomerate San Miguel Corp., has raised $300 million from its latest foray into the offshore perpetual bond market.

The overseas debt papers were priced to yield 6.75 percent per annum until 5.5 years, during which the power generation firm will have the option to redeem the securities or otherwise pay a higher rate, banking sources said.

Proceeds will be used by SMC Global Power for “general funding purposes.”

The offering was made by the power firm on a standalone basis, which means it will not be guaranteed by parent SMC.

Perpetual securities function like dividend-paying stocks or preferred shares as interest is paid for as long as these are held by investors. They offer a predictable source of income for the holder.

This issuance marks SMC Global Power’s return to the offshore bond market after raising last year $300 million from a 7.5-percent per annum perpetual bonds, which are not redeemable until 5.5 years later.

The latest perpetual bond issue was made after roadshows in Singapore and Hong Kong and investor calls in Europe that began last Friday. The offering was “oversubscribed,” a banker privy to the offering said.

Investors from Asia gobbled up the lion’s share of the perpetual securities deal at 87 percent, with Europeans taking the remaining 13 percent, SMC said in a disclosure to the Philippine Stock Exchange (PSE) on Thursday.

Parent conglomerate SMC, on the other hand, has finalized the terms of its P33.5 billion preferred shares issuance, an exercise meant to refinance an older series of preferred shares.

SMC’s new preferred shares issuance will be in three tenors. The five-year SMC preferred shares were priced to yield 5.9431 percent per annum while the seven- and 10-year tenors were priced at 6.3255 percent and 6.872 percent per annum, respectively, the firm said.

The public offering of SMC’s preferred shares will run from Aug. 24 to Sept. 11, 2015. The shares will be listed on the PSE on Sept. 21.

SMC will issue 446.667 million of the new series of preferred shares at an issue price of P75 per share. Doris Dumlao-Abadilla