SM to raise P15 B via local retail bonds

Henry Sy Sr. file photo

MANILA, Philippines — SM Investments Corp., one of the country’s largest conglomerates, is raising as much as P15 billion from a retail bond offering, returning to the local bond market after its last issuance two years ago.

In a press statement on Monday, SMIC said its board of directors had approved the issuance of fixed-rate peso retail bonds worth P10 billion with an option to upsize by  P5 billion more.

The bonds will be offered in one or two tranches with tenors of seven and/or 10 years.

SMIC has appointed BDO Capital and Investment Corp. as issue manager.

“The proceeds of the bonds will be used to refinance maturing debt and for various expansion projects,” the company said.

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

The last time SMIC tapped the local bond market was in 2012, when it issued fixed-rate bonds in two tranches, of which the seven-year tenor carried a coupon rate of 6 percent and the 10-year tenor had a coupon rate of 6.9442 percent.

SMIC, founded by the country’s wealthiest man Henry Sy, 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 minority stake in mining firm Atlas Consolidated Mining & Development Corp.