SM Prime eyes P100-B bond program

MANILA,  Philippines  —The Sy family’s property conglomerate SM Prime Holdings Inc. aims to raise as much as P100 billion from the debt market, anticipating potential delays in its record-breaking initial public offering (IPO).

In a stock exchange filing on Monday, SM Prime revealed plans for a P100 billion long-term bond program. It did not provide other details.

The move aligns with efforts to prepare other sources of funding to support its aggressive expansion this year.

Business tycoon and SM Prime executive committee chair Hans Sy earlier said there was “no rush” to launch a $1-billion real estate investment trust (REIT) IPO, which would have been the largest in the country’s history.

SM prime previously said it would inject 12 to 15 shopping malls, a major driver of earnings in the aftermath of the health crisis, into the REIT company.

READ: SM Prime in ‘no rush’ to launch $1-B IPO

Sy also said that SM Prime had sufficient financial resources to bankroll its expansion, which includes a 360-hectare reclamation project in Manila Bay.

Several analyst expect bullish stock market conditions to return once the Bangko Sentral ng Pilipinas begins winding down high interest rates, which is expected later this year.

Meanwhile, SM Prime will continue to accelerate spending in 2024, recently announcing a P100-billion capital spending program to support its expansion.

On Monday, SM Prime said earnings growth was sustained as net income soared to 33 percent to P40 billion in 2023 while revenues revenues reached P128.1 billion, a gain of 21 percent.

The growth was mainly driven by malls, whose revenues expanded by 30 percent to nearly P72 billion.

“The favorable result we achieved in 2023 reflects the strong support and trust from our tenants and customers despite the economic challenges encountered in 2023,” said SM Prime President Jeffrey Lim.

READ: SM to build 2 more malls this year, another 5 in 2024, says exec

“We continue to see this growth momentum this year as we pursue our expansion plans in our key businesses, and explore new opportunities to expand our businesses,” he added.

The developer’s residential group, led by SM Development Corp., saw revenues increase by 8 percent to P43.1 billion. Reservation sales hit P102 billion, translating to 21,000 units sold during the past year.

Its offices, hotels, and convention centers reported P13.1 billion in revenues in 2023, a combined gain of 26 percent.