SM unit to issue fixed-rate bonds

TycooN Henry Sy’s flagship holding firm SM Investments Corp. plans to raise as much as P15 billion from an offering of long-term peso-denominated bonds, boosting fresh funds for the expansion of its office and hotel property businesses.

In a statement issued on Friday, SMIC said its board approved the issuance of fixed rate bonds with tenors of 10 and 15 years and a base offering size of P10 billion. The firm was also given an option to increase the issuance by P5 billion in case of strong demand.

SMIC has appointed BDO Capital and Investment Corp. and First Metro Investment Corp. as co-lead managers for the offering. The proceeds of the bonds would be used for general corporate purposes, the statement said.

The board also authorized the management to negotiate and finalize the terms and conditions, including pricing and any increase in issuance amount as well as to execute any and all documents necessary to implement the retail bond issue.

“This is largely for expansion projects like the 3 E-Com [building] and the hotels,” said SMIC investor relations chief Cora Guidote.

The last time SMIC tapped the local retail bond market was in 2009 with a P10-billion issuance.

SMIC is the country’s dominant player in retailing, banking (through Banco de Oro, Unibank and China Bank) and shopping mall development (SM Prime Holdings Inc.). It is also a fast-growing player in the residential segment (SM Development Corp.) as well as in hotels, leisure estate and convention segment. It also has a 17.9-percent stake in mining firm Atlas Consolidated Mining and Development Corp.

Based on its closing price of P651 a share on Friday, SMIC had a market capitalization of P396.5 billion at the local stock market.

SMIC grew its net profit last year by 15 percent to P21.2 billion on higher earnings from core banking, retailing, shopping mall and real estate businesses. Consolidated revenues rose 13 percent to P200.7 billion from a year ago as all core businesses reported strong growth.—Doris C. Dumlao