Conglomerate SM Investments Corp. plans to issue P15 billion worth of fixed-rate retail bonds in August to repay maturing debt.
SMIC said in a registration statement filed with the Securities and Exchange Commission it would issue up to P10billion in fixed-rate bonds, with an oversubscription option for another P5 billion.
The P15-billion bonds would include 3-year Series H Bonds due 2023, 5-year Series I bonds due 2025 and 7-year Series J Bonds due 2027.
The bond offering represents the first tranche of the group’s P30-billion bond shelf registration program, which is still subject to SEC approval.
SMIC hired BDO Capital and Investments Corp. and Chinabank Capital as joint underwriters for the offering. The bonds will be listed with Philippine Dealing & Exchange Corp.
The company will use net proceeds from the bond offering to refinance debt and maturing loans.
The company said it had P16.48 billion in loans maturing from 2020 to 2023 from eight lenders, such as MUFG Bank Ltd., Mizuho Bank Ltd., Landbank of the Philippines, The Hongkong & Shanghai Banking Corp., Citibank NA, Cathay United Bank, Development Bank of the Philippines and Philippine National Bank.
The initial tranche of the bonds was rated PRS Aaa by local debt watcher Philippine Ratings Services Corp. PRS Aaa is the highest rating assigned by PhilRatings, denoting that such obligations are of the highest quality with minimal credit risk and that the issuing company’s capacity to meet its financial commitment on the obligations is extremely strong.
Net income of SM Investments fell 16 percent in the first quarter to P9 billion because of the declines in contribution from retail, property and banking segments with the imposition of a strict lockdown in mid-March.
The SM group is allocating P94 billion to P98 billion for 2020 capital expenditures.
The conglomerate said it would strengthen its digital offerings to adapt to changing consumer behavior amid the pandemic.
