SM Prime raises P15b from fixed-rate bond offering

Property developer SM Prime Holdings Inc. said Wednesday it raised P15 billion from the issuance of fixed-rate bonds.

SM Prime said in a disclosure to the stock exchange it issued P15 billion worth of five-year and seven-year bonds with interest rates of 4.8643 percent and 5.0583 percent yearly, respectively.

The P15-billon fixed rate bonds represent the first tranche of the company’s P60-billion bond shelf registration program approved by the Securities and Exchange Commission.

This means that SM Prime still has P45 billion worth of bonds that it can issue over the next three years.

SM Prime initially planned to issue P15 billion worth of bonds with an oversubscription option for another P5 billion.

It did not exercise the P5-billion oversubscription option as the country undergoes enhanced community quarantine amid the coronavirus disease 2019 pandemic.

SM Prime earmarked P80 billion in capital expenditures for 2020, up 16 percent from P69 billion it spent in 2019. This year’s capital expenditures will support the expansion of SM malls and residential businesses as well as landbanking activities.

The company said that of the P80 billion programmed for the year, 39 percent would be for residential business while 37 percent would be for mall expansion.

The remaining 24 percent will be allotted for land acquisitions for future projects and expansion of other businesses such as hotels, office and convention centers.

The property firm said the P80-billion program would be funded by a combination of local borrowings and internal funds.

SM Prime is set to open five new malls in the Philippines this year including those in in Butuan, Zamboanga, Daet, Caloocan and Roxas City.

It said that by the end of 2020, the mall business unit would have 79 malls in the Philippines and seven malls in China with a combined gross floor area of 10.2 million square meters.

Residential business SM Prime is scheduled to launch 15,000 to 20,000 residential units this year that include high-rise buildings, mid-rise buildings and house-and-lot projects.

Topics: SM Prime Holdings Inc. , fixed-rate bond
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