Conglomerate San Miguel Corp. (SMC) is preparing to return to the local bond market this year with a brand-new P40-billion public offering of debt securities to replenish working capital and support big-ticket infrastructure projects.
SMC has mandated BDO Capital & Investment, China Bank Capital and PNB Capital to work on the bond issuance, which comes soon after a similarly sized jumbo bond float completed by its energy arm, SMC Global Power Holdings Corp.
“This is for general corporate requirements, then maybe as equity if needed by its airport or MRT (Metro Rail Transit) 7 projects,” BDO Capital president Eduardo Francisco said in a chance interview with the Inquirer.
Sweet spot
Asked about the potential tenor of the securities, Francisco said it would depend on the market’s appetite, but added that the sweet spot could be in the five-, seven- and 10-year tenors.
They would be drawing from a new P60-billion bond shelf registered by SMC at the Securities and Exchange Commission, he said.
A shelf registration allows corporate issuers like SMC to offer new securities in tranches—whenever they deem the market favorable—within a three-year time frame.
This will be the second time this year that the San Miguel parent conglomerate would tap the local retail bond market.
In March, SMC raised P30 billion worth of five- and seven-year fixed rate bonds (series J and K), carrying coupon rates of 5.2704 percent and 5.8434 percent per annum, respectively. The bonds were listed on the Philippine Dealing & Exchange Corp.
SMC is set to build the P740-billion New Manila International Airport in Bulakan, Bulacan, the single most expensive infrastructure project in Philippine history. Rising on 2,500 hectares of coastal land along Manila Bay, the airport will have four parallel runways and a sprawling terminal building.
The conglomerate is also set to complete the 22-km MRT 7 project, which is projected to serve thousands of commuters from North Avenue in Quezon City to San Jose del Monte in Bulacan. INQ