SEC oks San Miguel Food and Beverage’s P15B bond offer

San Miguel Brewery has been producing beer for the last 126 years

The Securities and Exchange Commission (SEC) has approved a plan by local consumer giant San Miguel Food and Beverage (SMFB) to raise as much as P15 billion from a new retail bond offering.

This subsidiary of conglomerate San Miguel Corp. intends to offer the fixed-rate bonds in two series – one with five-year tenor and another with seven-year tenor – at face value, the SEC said in a press statement on Wednesday.

The bonds will be issued in minimum denominations of P50,000 each, and in integral multiples of P10,000 thereafter. They will be listed and traded in denominations of P10,000 on local fixed income platform Philippine Dealing & Exchange Corp.

Net proceeds from the offer will be used to fund the redemption of the outstanding 15 million perpetual preferred shares to be redeemed this March 2020 at a redemption price of P1,000 per share.

BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., Philippine Commercial Capital Inc., PNB Capital and Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp. have agreed to act as joint lead underwriters and bookrunners for the offer.

Local credit watchdog Philippine Rating Services Corp. (Philratings) has assigned a sterling credit rating of “PRS Aaa” with a “stable” outlook, to the upcoming offering. This is the highest rating in Philratings’ scale.

Obligations rated “PRS Aaa” are deemed to be of the “highest quality with minimal credit risk.” The borrower’s capacity to meet its financial commitment on the obligation is deemed “extremely strong.”