Offering to start April 30; issuance on May 19
By Doris C. Dumlao
Philippine Daily Inquirer
12:03 am | Thursday, April 24th, 2014
The Securities and Exchange Commission (SEC) has approved a plan by the country’s largest conglomerate SM Investments Corp. to raise as much as P15 billion from a fresh retail bond offering.
This marks SMIC’s venture into the local bond market after its last issuance two years ago.
Based on its regulatory filing, SMIC was allowed to register seven- and 10-year fixed rate bonds with a principal amount of P10 billion and an oversubscription of up to P5 billion. The bonds will be sold through a public offering, which will start on April 30 and end on May 12 this year. Issuance of the bonds is targeted on May 19.
The SMIC bonds will be issued in scripless form in minimum denominations of P20,000 each and in multiples of P10,000 thereafter.
Interest rate on the seven-year bonds is seen at a range of 4.7405 to 5.8405 a year and on the 10-year bonds, 5.4114 to 6.4114 a year.
The bonds are intended to be listed on the local fixed-income trading platform Philippine Dealing and Exchange Corp. (PDEx).
In its regulatory filing, SMIC said it would use the proceeds from the offering primarily to refinance existing debt obligations as well as finance expansion projects, particularly for SM Arena and the Asinan project in Parañaque City.
On the SM Arena project, SMIC plans to use part of the proceeds for retention payments due to suppliers and contractors of the completed 67,536-square-meter-commercial building.
The Asinan project, on the other hand, involves the construction of a 25,000-sqm warehouse building on the property.
BDO Capital, BPI Capital, China Bank and First Metro Investment Corp. have agreed to act as underwriters for the offering with a commitment to distribute P2.5 billion each. They will also have the exclusive right and priority to exercise the overallotment option of up to P5 billion.
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 yield of 6.9442 percent.
Local creditwatcher Philippine Rating Services Corp. earlier assigned a triple-A rating on SMIC’s new bond issuance.
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