SMIC plans to issue P50B worth of bonds

The country’s leading conglomerate SM Investments Corp. plans to raise P50 billion from an offering of retail bonds within the next three years using the shelf registration window allowed by corporate regulators.

At the sidelines of the turnover ceremony of the P100-million Henry Sy Sr. Innovation Center donated by the SM group to Miriam College Wednesday, SMIC chief finance officer Jose Sio told reporters that the conglomerate was working on a retail bond offering before the end of this year, subject to approval from the Securities and Exchange Commission.

He said SMIC was planning a shelf registration of bonds worth P50 billion, the first tranche of which will be issued before yearend.

“It will be more for supporting our subsidiaries’ capitalization and expansion and also for the non-core investment group,” Sio said.

Outside of its core banking (BDO Unibank and China Bank), property (SM Prime) and retailing businesses (SM Retail), for instance, the SM group has interests in mining (Atlas Consolidated Mining) and community mall development (as an investor in DoubleDragon Properties’ flagship subsidiary CityMall Commercial Centers Inc.)

Asked what tenor SMIC was considering for its retail bond offering, Sio said: “The Philippine market is liquid and we would like to see a tenor of seven to 10 years. That will be the sweet spot.”

The SEC’s shelf registration mechanism allows an issuer like SMIC to register and sell under the same prospectus and other regulatory filing requirements a certain volume of securities that the issuer does not intend to use up right away. Its property arm SM Prime, for instance, has a three-year window to use up the shelf registration of up to P60 billion worth of bonds.