SMC gets go-ahead to issue P15B in five-year retail bonds

Conglomerate San Miguel Corp. said it had obtained regulatory approval to sell up to P15 billion in five-year retail bonds this month, mainly to refinance debt.

SMC, a food and beverage giant that launched an aggressive diversification plan into infrastructure a decade ago, said the Securities and Exchange Commission gave it the go-signal to sell the debt from March 21 to 27 this year. The offer consists of P10 billion plus an oversubcription option of P5 billion.

The bonds will be issued on April 7, 2017, comprised of Series D Bonds due 2022. These will pay a fixed interest rate of 5.1923 percent per year.

The bonds will be listed on the Philippine Dealing & Exchange Corp. on April 7, SMC added.

The offer marks the second tranche of a massive P60 billion bond offer program approved by the SEC under a three-year shelf registration. Companies tap this scheme to allow flexibility in the timing of fund-raising activities, especially when market conditions rapidly shift.

The first tranche was launched in February this year. SMC raised P20 billion to refinance debt and pay for its expansion plans.

The company’s first tranche consisted of five-year bonds priced to yield 4.8243 percent a year, seven-year bonds priced to yield 5.2840 percent per year and 10-year bonds yielding 5.7613 percent per year.

SMC controls the country’s biggest beer maker, San Miguel Brewery Inc., and its larger oil refiner, Petron Corp. It has been expanding its footprint in infrastructure, which now spans almost the entire Southern Metro Manila tollroad network. Last year, it started work on the $1.5-billion Metro Rail Transit Line 7, which will link Quezon City in Metro Manila to San Jose Del Monte, Bulacan. —MIGUEL R. CAMUS