SMC eyes $1-B share sale

The country’s biggest firm by assets wants to strike while the iron is hot.

The president of San Miguel Corp. on Tuesday said the conglomerate might raise as much as $1 billion —in its equivalent value in pesos—through another preferred share issue to take advantage of prevailing low interest rates to reduce its liabilities.

“There is also a clamor from investors who were not able to buy the last issue,” San Miguel president Ramon Ang said, referring to the conglomerate’s P33.5-billion preferred share issue last month that was five times oversubscribed by a market hungry for high-yielding securities in a low-interest rate regime.

“We may be able to do another issue this year to satisfy this need,” he added, without disclosing details about the planned issue.

San Miguel’s latest preferred share issue was sold at P75 a share and was listed on the Philippine Stock Exchange.

Observers welcomed San Miguel’s move to sell more preferred shares, noting that the local market remained hungry for investment options, especially those that guarantee above-market yields.

“I’m positive about it,” BDO Capital president Ed Francisco said. “There’s enough liquidity in the market and unmet demand from the recent peso-denominated preferred shares they refinanced.”

He pointed out that the issue would likely be met with enthusiasm by investors even if interest rates around the world were already set to rise, especially with the US Federal Reserve poised to raise its key rates for the first time in a decade.