Leading conglomerate SM Investments Corp. has upsized its new seven-year bond offering to P20 billion from an initial offer of P15 billion, citing brisk demand from both retail and institutional investors.
The bonds due 2023 were priced to yield 5.1590 percent a year.
In a statement on Thursday, SMIC reported strong demand from a wide spectrum of investors ranging from individuals in the retail market to banks, investment funds, pension funds, insurance companies and other corporates.
The Sy family-led conglomerate said this strong demand prompted the issuer—through the joint lead underwriters and bookrunners—to fully exercise the issue’s P5 billion oversubscription option at the end of the offer period, which opened on Nov. 25, 2016 and closed on Dec. 2.
The bonds are set to be issued on Dec. 9, 2016.
This offering is the maiden issue from SMIC’s P50 billion bond shelf registration with the Securities and Exchange Commission.
Shelf registration gives a three-year leeway for an issuer to offer securities using the same prospectus.
“The bond proceeds are intended to finance future investments and strategic acquisitions in SMIC’s core business segments namely, property, retail and financial services,” SMIC said.
SMIC’s bonds attained the highest rating of “PRS Aaa” from Philippine Rating Services Corp. (PhilRatings).
This rating means that the obligations are deemed of the “highest quality with minimal credit risk, and that the issuing company’s capacity to meet its financial commitment on the obligations is extremely strong.”
The joint issue managers for this offering are BDO Capital & Investment Corp. and China Bank Capital Corp., which also acted as joint lead underwriters and joint bookrunners together with BPI Capital Corp. and First Metro Investment Corp.
SB Capital Investment Corp. acted as co-lead underwriter of the bond issue.
SMIC is the country’s leading player in retail, banking and property development.
Its property arm SM Prime Holdings is among the largest property companies in Southeast Asia in terms of market capitalization.
Its interests in banking are in BDO Unibank Inc., the country’s leading bank, and in China Banking Corp., the sixth largest private bank.
Combined, these two banks have a network of over 1,400 branches nationwide.
In retailing, SM is a household brand.
Its portfolio includes department stores under The SM Store alongside leading specialty retailers including Ace Hardware, SM Appliances, Homeworld, Our Home, Toy Kingdom and Watsons ; and its food retail chains, namely, SM Supermarket, SM Hypermarket, Savemore and WalterMart stores.