SM Prime, BPI tap the bond market
SM Prime Holdings
Two local blue chip companies – SM Prime Holdings Inc. and Bank of the Philippine Islands – ventured into the local bond market on Monday, offering to the public new debt securities summing up to at least P25 billion.
SM Prime Holdings, one of the largest property developers in Southeast Asia, is offering much as P20 billion worth of new bonds. The five-year bonds were priced to yield 4.8643 percent per annum while the seven-year bonds were priced to yield 5.0583 percent per annum.
Southeast Asia’s oldest bank Bank of the Philippine Islands (BPI) also launched a new bond offer worth at least P5 billion with a tenor of one and a half years at an interest rate of 4.05 percent per annum.
SM Prime’s offer will run from March 2 to 13 this year, while the listing date on local fixed income trading platform Philippine Dealing & Exchange Corp. is on March 25.
BPI’s bond offering will run from March 2 to 17 while the listing date is set on March 27.
For SM Prime’s bonds, BDO Capital is a joint issue manager along with China Bank Capital Corp. They also act as joint lead underwriters and joint bookrunners together with BPI Capital Corp., EastWest Banking Corp., First Metro Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp.
This marks the first tranche of SM Prime’s P100-billion bonds recently approved by the Securities and Exchange Commission (SEC) under shelf registration. The base offer is worth at P15 billion but SM Prime has an option to upsize by another P5 billion.
Under the shelf registration window of the SEC, securities to be issued in tranches may be registered for an offering to be made on a continuous or delayed basis for a period not exceeding three years. The issuer is allowed to use the same prospectus for various tranches of securities offering under such mechanism.
“SM Prime is set to establish further integrated property developments in various developing provincial cities in the Philippines. The proceeds from the retail bond will enable the company to pursue it expansions plans for its core businesses, primarily of its malls projects, which is one of the main growth drivers of the company,” SM Prime president Jeffrey Lim said in a disclosure to the Philippine Stock Exchange.
The bonds will be issued in minimum denominations of P20,000 and in multiples of P10,000 thereafter.
This series of SM Prime bonds due on 2025 and 2027 is the property giant’s seventh offering of triple-A rated peso-denominated retail bonds to the public.
For BPI’s bond offer, the minimum investment amount is P1 million with increments of P100,000. The bank reserves the option to upsize the offering and adjust offering timetable.
“This offering is aligned with our strategy to grow and diversify our funding sources. We will continue to explore similar opportunities to further increase our capacity to deliver relevant financial services to more Filipinos,” said BPI treasurer Dino Gasmen.
BPI Capital Corp. and ING Bank N.V., Manila Branch (ING), are the joint lead arrangers of the offer. BPI Capital is sole selling agent, while ING is participating selling agent.
More and more banks are tapping the local bond market to diversify their funding source.
