SM Prime to raise up to P25B from bond market

Real estate giant SM Prime Holdings Inc. plans to raise up to P25 billion from the debt market ahead of its massive expansion into the luxury and low-income residential segments next year.

The Sy family-led developer on Thursday said it had submitted to the Securities and Exchange Commission an application for a permit to sell up to P20 billion in fixed-rate bonds.

READ: SM Prime readies P10-B buyback program

There will be an oversubscription option of up to P5 billion in case of high demand, SM Prime noted in its disclosure to the stock exchange.

The offering, which represents the second tranche of SM Prime’s P100-billion bond program that was approved in 2024, will consist of three-year series Y bonds due 2028, six-year series Z bonds due 2031, and 10-year series AA bonds due 2035.

In a separate regulatory filing, SM Prime said the Philippine Rating Services Corp assigned a PRS Aaa rating to its planned issuance.

Highest rating

This is the highest such credit rating that can be assigned to a domestic bond issuance and signifies that the issuer has an “extremely strong” capacity to meet its financial obligations.

SM Prime, whose portfolio comprises malls, offices and residential projects, raised P25 billion from the first tranche in June.

The latest disclosure comes after SM Prime unveiled its P10-billion share buyback program, a move seen to raise its share price.

In 2025, SM Prime plans to spend up to P110 billion to expand its mall business while also venturing into both the affordable and high-end residential segments.

The company will consolidate all its residential projects under the SM Residences brand to cover a wider range of markets.

At the same time, SM Supermalls will build three new domestic malls in 2025 in response to changing consumer behavior across the country.

In January-September, the firm’s net income reached P33.9 billion, up by 12 percent. —Meg J. Adonis