SM Prime off to bond market anew to raise P10B
Property giant SM Prime Holdings Inc. (SMPH) is returning to the local bond market for the second time this year with the goal of raising as much as P10 billion from the sale of debt securities.
The base offer is P5 billion but there will be an option to upsize by another P5 billion in case of oversubscription. This is the third drawdown from SMPH’s P100-billion shelf registration program.
The bonds would have a tenor of seven years, SMPH disclosed to the Philippine Stock Exchange on Monday.
The last time that SMPH tapped the local bond market was in February this year, raising P10 billion to fund shopping malls, residential and other commercial property developments.
This 2021, SMPH expects to incur capital expenditures of around P80 billion, which it will cover via internally generated funds and external borrowings.
SMPH currently has 55 residential projects, 43 of which are in Metro Manila. The company aims to launch 15,000 to 20,000 residential units this year.
On the shopping mall business, SMPH has 76 malls in the Philippines with 8.6 million square meters of gross floor area (GFA) and seven shopping malls in China with 1.3 million square meters of GFA.
Subject to local governments’ guidelines and prevailing quarantine classifications, the company intends to launch three new malls in the Philippines. These new malls, plus the expansion of existing malls, will expand its GFA by 300,000 square meters.
On the office property segment, SMPH has 12 office buildings with a combined GFA of about 700,000 square meters.
The hotels and convention centers business unit has an existing portfolio of five convention centers, two trade halls and eight hotels with over 2,000 rooms.
SMPH posted P5.2 billion in second quarter net profit, rebounding by 148 percent from a low base in the same quarter last year when unprecedented pandemic-induced quarantine restrictions disrupted shopping mall operations.
Compared to the first quarter 2021 net profit of P6.48 billion, however, SMPH’s net profit sequentially declined in the second quarter.
