SMIC’s P30-B bond float OKd
The Securities and Exchange Commission (SEC) has cleared a P30-billion bond offering program stretched out for the next three years by the country’s largest conglomerate, SM Investments Corp. (SMIC).
The first tranche of the offering would be worth a maximum of P10 billion, including an option to upsize by P5 billion, the SEC said in a press statement on Thursday.
The first tranche would comprise 3.5-year bonds due in 2024, to be issued in minimum denominations of P20,000 and in multiples of P10,000 thereafter.
The bonds are expected to be listed and traded on the Philippine Dealing & Exchange Corp.
Net proceeds from the offer, estimated at P9.89 billion, would be used by SMIC—the country’s leading player in the property, banking and retailing businesses—to refinance existing debt obligations.
As the Bangko Sentral ng Pilipinas seeks to temper the impact of the COVID-19 pandemic, local interest rates have slipped to record lows. The bond market has become attractive to corporations that want to lock in long term funds at a lower cost.
The first tranche of the bonds would be offered to the public at face value through BDO Capital & Investment Corp., China Bank Capital, BPI Capital Corp., First Metro Investment Corp. and SB Capital.
The bond offering was approved by the SEC en banc under the shelf registration window. It would replenish SMIC’s old shelf amounting to P50 billion worth of bonds.
A shelf registration allows a company to stagger the sale of securities over a period not exceeding three years.
The last time that SMIC tapped the local bond market was in 2016 when it issued P20 billion worth of retail bonds due in 2023 priced at 5.1590 percent per annum.
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