REGIONAL property giant SM Prime Holdings Inc. has launched a local retail bond offering worth as much as P20 billion, proceeds from which will fund mall expansions and refinance debt.
SM Prime has priced its 5.25-year retail bonds to yield 4.5095 percent per annum while the 10-year bonds were priced to yield 4.799 percent per annum.
The property developer is authorized to issue a principal amount of P15 billion plus an option to upsize by P5 billion.
The public offering of the peso-denominated bonds due 2021 and 2025 started last Nov. 4 and will run until Nov. 13 this year. The bonds will be issued on Nov. 25.
“The retail bond to be issued by SM Prime will largely support funding for our mall expansion programs in the coming years. This is a testament to management’s confidence that the economic growth of the Philippines will be sustained over the medium term and will eventually have a positive impact on the provinces as growth spreads to these areas.” SM Prime president Hans Sy said in a press statement. This local bond offering is SM Prime’s second foray into the local debt market subsequent to a successful maiden issue of P20 billion bonds in 5.5, seven- and 10-year tenors last year.
By the end of 2015, SM Prime will increase its number of malls to 55 in the Philippines with an equivalent mall footprint of 7.3 million square meters in terms of gross floor area (GFA). Next year, SM Prime is poised to open six new malls and expand two existing malls, thus acquiring additional mall space of 571,631 square meters.
Similar to its previous bond issue, SM Prime’s new retail bonds have been rated “PRS Aaa” by Philippine Rating Services Corp. (PhilRatings), the highest rating assigned by this credit watchdog. This triple-A rating suggests the smallest degree of investment risk and denotes an extremely strong repayment capacity.
Acting as joint issue managers and joint bookrunners for this offering are BDO Capital & Investment Corp., China Banking Corp. and First Metro Investment Corp., which are also joint lead underwriters. BPI Capital Corp., PNB Capital and Investment Corp., United Coconut Planters Bank, SB Capital Investment Corp., East West Banking Corp., RCBC Capital Corp., Land Bank of the Philippines and Philippine Commercial Capital Inc. are participating underwriters.
SM Prime said it remained “committed to its role as a catalyst for economic growth, delivering innovative and sustainable lifestyle cities, thereby enriching the quality of life of millions of people.”