SMDC to raise P4B from sale of debt papers

MANILA, Philippines—Fast-growing residential property developer SM Development Corp. is raising P4 billion for fresh expansion plans from the sale of debt papers to selected institutional investors.

In a disclosure to the Philippine Stock Exchange on Thursday, the SMDC said its board had approved the issuance of fixed rate corporate notes and appointed BDO Capital and Investment Corp. and Standard Chartered Bank as the joint lead managers.

Top corporations usually resort to the issuance of corporate notes instead of retail bonds for quicker fund-raising. Since corporate notes are issued to no more than 19 institutional investors, the documentation process is less tedious.

The SMDC disclosure said the determination of the terms and conditions of the corporate notes had been delegated by the board of directors to the management.

SMDC grew its net profit in 2011 by 38 percent to P4.18 billion on a double-digit surge in revenues from residential development projects. Consolidated revenues amounted to P16.99 billion, higher by 70 percent year on year. Cash flow based on earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to P4.95 billion, for an EBITDA margin of 30 percent.

In a recent study done by the Advisory and Research Services of Colliers International Philippines, SMDC captured the largest market share of 24 percent in Metro Manila. SMDC has consistently been No. 1 in Colliers’ property surveys since July 2009.

SMDC currently has 15 residential projects under its SM Residences brand and two projects under the M Place brand. For the rest of 2012, five more new residential condominium projects will be launched in Metro Manila.