SMC completes largest PH company bond issue

Conglomerate San Miguel Corp. (SMC) completed the country’s largest corporate debt issuance to date, raising P60 billion through the sale of long-term bonds in a bid to lower its financing costs.

The food, drinks, energy and infrastructure conglomerate listed the bonds on the Philippine Dealing & Exchange Corp. on Dec. 14, data from the fixed-income exchange showed.

The bonds were offered in three tranches. SMC’s Series L bonds due 2028 will pay a yearly interest rate of 7.4458 percent, Series M due 2029 will pay 7.8467 percent and Series N due 2032 will pay an interest rate of 8.489 percent.

SMC president Ramon Ang said in a text message the proceeds would mainly be used for debt refinancing and general spending requirements.

SMC earlier raised P30 billion from the bond market last March while power subsidiary, SMC Global Power Holdings, raised another P40 billion from the sale of bonds in July.

This latest transaction strengthens the group’s balance sheet as Ang said they were wary of a global recession in 2023.

“We hope the Philippines will not be affected by the world economic slowdown,” he said.

The global energy crisis and surging inflation has weighed on SMC’s businesses, including power.

Last November, SMC won a temporary restraining order from the Court of Appeals to halt heavy losses from a power supply deal with energy retailer, Manila Electric Co.

This was after the group’s petition for higher power rates was denied by the Energy Regulatory Commission.

SMC’s consolidated net income fell 62 percent to P12.9 billion during the first nine months of the year even as revenues jumped over 70 percent to P1.1 trillion.

The conglomerate’s income from operations rose 24 percent to P108.5 billion from January to September. INQ