The power arm of San Miguel Corp. said Tuesday its board approved the offer and issuance of additional senior perpetual capital securities amounting to at least $100 million.
San Miguel Global Power Holdings Corp. disclosed to the Philippine Dealing & Exchange Corp. that the issuance is subject to prevailing market conditions.
It said it would use the net proceeds for pre-development costs of solar energy projects and capital expenditures related to battery energy storage projects.
The company said the additional securities would be consolidated with and form a single series.
San Miguel Global tapped Standard Chartered Bank as sole lead manager; DB Trustees (Hong Kong) Ltd. as trustee and Deutsche Bank AG, Hong Kong Branch as paying agent, calculation agent transfer agent and registrar; and Latham & Watkins as listing agent.
CreditSights Inc., a financial research company, cited San Miguel Global’s improved credit metrics over the past five quarters and predicted further gains due to several positive factors.
CreditSights said lower thermal coal input costs, projected by its sister company BMI to average $135 per ton in 2024 amid increased supply and softening demand, would bolster expectations.
CreditSights said last month the full-year impact of a larger 910-megawatt emergency power supply agreement (EPSA) with Manila Electric Co. is another positive factor.
Additional contributors include the newly-commissioned Mariveles power plant, 220 megawatt-hours of battery energy storage systems (BESS) projects completed in the second half of 2023, 110 MWh of BESS projects completed in the first quarter of 2024, and a new 400-megawatt interim power supply agreement secured from August 2024 to February 2025.
SMCGP’s first-half results were strong as expected, CreditSights said. Revenue and earnings before interest, taxes, depreciation, and amortization climbed 17 percent and 44 percent year-on-year, respectively, driven by robust power sales volume growth, new capacities and power contracts, and lower thermal coal input costs.
“While liquidity remained poor, we expect bank funding channels to remain open for SMCGP for refinancing of its existing loan facilities given its improving credit profile and the strong reputation of its parent SMC,” the company said.
SMCGP’s recent redemption of its $783 million 2024 perpetual securities also signals management’s willingness and ability to repay outstanding perpetual securities, CreditSights said.
