SM group raising funds via 18-month debt note issuance

The country’s largest conglomerate, SM Investments Corp. (SMIC), is raising P5.6 billion through the issuance of debt notes to selected institutional investors.

The 18-month fixed-rate notes were priced to yield 2.875 percent a year and will mature on Jan. 22, 2022.

The notes will be listed on the local fixed income trading platform, Philippine Dealing and Exchange Corp., SMIC disclosed to the Philippine Stock Exchange on Wednesday.

The new issuance is specifically targeting qualified institutional buyers (QIBs).

It is exempted from the Securities and Exchange Commission (SEC) registration requirement since the assumption is the buyers (QIBs) are familiar with their investments.

For top corporations, the issuance of corporate notes to less than 19 investors is a less tedious way of raising funds compared to a public offering.

SMIC has mandated BDO Capital and China Bank Capital as joint lead arrangers for the offering of corporate notes.

A number of large corporations are tapping the local and offshore bond market to take advantage of record-low interest rates and ample financial liquidity as a result of the aggressive monetary easing of central banks across the globe to prevent the current coronavirus pandemic from causing a financial crisis.

SMIC, which is led by the Sy family, controls the largest retail, banking and property enterprises in the country. —DORIS DUMLAO-ABADILLA