SY family-led SM Investments Corp. has filed an application with the Securities and Exchange Commission to raise up to P20 billion from a domestic offering of seven-year local bonds.
This is part of a P50-billion bond issuance that SMIC seeks under the SEC’s shelf registration mechanism, which issuers 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.
As issuers are given a three-year window to use the shelf registration mechanism, they can work on a better timing to proceed with a planned offerings especially when financial markets are volatile.
In its registration statement, SMIC said the first tranche of offering will be P15 billion, with an option to upsize by P5 billion. Proceeds will be used to refinance maturing debt obligations as well as fund future investments and strategic acquisitions.
The proposed issuance has obtained a triple-A rating (PRS Aaa) from local credit watcher Philippine Rating Services Corp. (Philratings). This is the highest rating assigned by PhilRatings, denoting that such obligations are “of the highest quality with minimal credit risk” and that the issuer’s capacity to meet its financial commitment on the obligations was “extremely strong.”
PhilRatings also assigned a “stable” outlook for the ratings for SMIC’s proposed bonds.
Founded by tycoon Henry Sy Sr., SMIC is one of the country’s largest publicly listed companies with market-leading businesses in banking, property and retail operations.