Conglomerate San Miguel Corp. (SMC) has tapped six foreign banks to arrange its $3-billion medium-term notes (MTN) program, fleshing out funding for its big-ticket projects.
In a disclosure to the Philippine Stock Exchange on Thursday, SMC said it had established the new MTN program with Australia and New Zealand Banking Group Ltd., Credit Suisse (Singapore) Ltd., DBS Bank Ltd., Mizuho Securities Asia Ltd., Standard Chartered Bank and UBS AG Singapore Branch as the initial dealers.
This MTN program allows SMC to issue, from time to time, notes or perpetual capital securities in series or tranches, denominated in US dollars or any other currency agreed with the relevant dealers. They may be issued on the same or different issue dates up to the program limit of $3 billion, subject to compliance with all applicable laws and regulations.
For this offshore debt paper, the SMC board earlier approved the issuance of an initial tranche of up to $500 million worth of perpetual securities out of this program, the company earlier disclosed.
Proceeds will be used by the corporation to finance its investments and various projects, cover existing obligations and fund general corporate purposes, SMC said.There will be no public offering of instruments under the program in the Philippines or in the United States.The principal amount and timing of drawdown under the program are dependent on several factors, including but not limited to market conditions and corporate needs of the corporation.SMC has applied with the Singapore Exchange Securities Trading Ltd. for the listing of these instruments.
This program is seen to give SMC ready access to funding for investments and projects, such as the MRT 7 (Quezon City to Bulacan Metro Railway Transit) construction, the Bulacan airport, as well as the refinancing of its existing obligations.
With an MTN program, an issuer can generate constant cash flows from debt issuance, typically with tenors of five to 10 years. This will allow the company to tailor its borrowing to meet its financing needs.
These securities can be continuously offered to investors through a dealer, with investors being able to choose from differing maturities.Meanwhile, Philippine Rating Services Corp. has assigned a rating of PRS Aaa, with a stable outlook, to SMC’s planned P60-billion shelf registration of commercial paper. —Doris Dumlao-Abadilla