SMC unit rolls out P 15-B retail bonds offer

Local consumer giant San Miguel Food and Beverage Inc. (SMFB) rolled out on Monday a P15-billion maiden offering of retail bonds, tapping the local bond market for the first time since the consolidation of San Miguel Corp.’s traditional beer and food businesses under its roof. SMFB’s bonds were priced to yield 5.05 percent a year for the five-year term and 5.25 percent for the seven-year tenor, SMFB disclosed to the Philippine Stock Exchange on Monday.The offer period started on Feb. 24 and would run until March 2 this year.

SMFB’s inaugural bonds due 2025 and 2027 will be listed on the local fixed-income trading platform Philippine Dealing and Exchange Corp. on the issue date on March 10, 2020.

The Securities and Exchange Commission approved SMFB’s retail bond offering last week.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 the local fixed-income platform.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 a share.

BDO Capital and 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. are the joint lead underwriters and bookrunners for the offer.

Local credit watchdog Philippine Rating Services Corp. (Philratings) has assigned a 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.” In 2018, San Miguel underwent an internal restructuring to consolidate its food and beverage business under SMFB, which now includes beverage units San Miguel Brewery Inc. and Ginebra San Miguel Inc. on top of food manufacturing arm San Miguel Purefoods Co. INQ