SM Investments Corp. (SMIC), the country’s largest conglomerate, plans to raise as much as P30 billion from a series of local bond offerings in the next three years.
The initial issuance is proposed at a maximum of P15 billion, proceeds from which can be used for its expansion program over the medium term.
In a disclosure to the Philippine Stock Exchange, SMIC said it had submitted to the Securities and Exchange Commission a registration statement for its proposed debt securities program amounting to P30 billion under a shelf registration of three years.
The initial issuance of the bonds will be sized at P10 billion with an oversubscription option of up to P5 billion, the disclosure said.
Under the shelf registration program, securities may be registered for an offering to be made on a continuous basis or in tranches for a period not exceeding three years. Capital raising can be done by issuers as they are needed and/or when market conditions are favorable for them.
The new shelf registration is seen to replenish SMIC’s old shelf amounting to P50 billion worth of bonds.
Local credit watchdog Philippine Ratings Services Corp. (PhilRatings) assigned a rating of PRS Aaa to the initial tranche of SMIC’s bond offering.
PRS Aaa is the highest rating assigned by PhilRatings, denoting that such obligations are “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 last time that SMIC tapped the local bond market was in 2016 when it raised P20 billion from the offering of bonds due 2023 carrying an interest rate of 5.1590 percent a year.
Valued by the stock market at P1.13 trillion, SMIC has interests in the leading banking, property development and retailing businesses in the country.
—DORIS DUMLAO-ABADILLA