SM Investments Corp. sells P5-billion worth of long-term debt paper

MANILA, Philippines—Tycoon Henry Sy’s flagship SM Investments Corp. has boosted funds for expansion with the sale of P5 billion worth of long-term debt paper to selected institutional investors.

SMIC disclosed to the Philippine Stock Exchange on Thursday, that it had successfully raised the amount from the issuance of seven-year and 10-year fixed rate corporate notes.

The IOUs were priced at yields of 5.75 percent for the seven-year tranche and 6.625 percent for the 10-year tranche.

SMIC president Harley Sy said the conglomerate was highly encouraged by the market reception and support to this latest fund-raising activity. “This notes issuance is indeed a clear indication of the financing community’s trust and confidence in the SM group,” he said.

Proceeds will be used “for general corporate purposes and to fund projects of companies within the SM group,” said SMIC chief finance officer Jose Sio.

Unlike retail bonds, which are offered through a public offering and must go through a more tedious regulatory approval process, corporate notes are a quicker fund-raising option for top-tier corporations as they are sold to no more than 19 selected institutional investors.

BDO Capital and Investment Corp., First Metro Investment Corp. and HSBC Ltd. acted as the joint lead arrangers and book runners of the issue.

SMIC grew its first semester net profit by 13 percent year-on-year to P9.64 billion on strong contribution from its banking, retailing and shopping mall businesses. Among SMIC’s core businesses, banking contributed the most to the company’s net income, accounting for 31.4 percent. This was followed by retailing and shopping malls with 30.4 percent and 23.3 percent, respectively. SM’s real estate business accounted for 14.9 percent.