Regulator okays SMIC’s plan to sell P30-b bonds in 3 years

The Securities and Exchange Commission approved the P30-billion bond shelf registration program of conglomerate SM Investments Corp.

SMIC said in a disclosure to the stock exchange it received a pre-effective clearance from the SEC regarding its proposed debt securities program. The bonds will be issued in tranches over a three-year period.

SM Investments plans to issue of up to P5 billion fixed-rate bonds with an oversubscription of up to P5 billion in the first tranche. The Series H bonds will have a tenor of 3.5 years and will mature in 2024.

The net proceeds from the fund-raising activity will be used to fully pay the conglomerate’s maturing loans. These are short-term loans which were utilized to fund the working capital requirements of the company and other corporate purposes. These short-term loans are extended on a monthly basis.

The bonds will be listed with the Philippine Dealing & Exchange Corp.

SMIC tapped BDO Capital and Investments Corp., ChinaBank Capital, BPI Capital Corp., First Metro Investments Corp. and SB Capital as the joint lead underwriters for the transaction.

The Series H Bonds were assigned PRS Aaa rating with a stable outlook by the Philippine Ratings Services Corp.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. This means that the issuer’s capacity to meet its financial commitment is extremely strong. PRS Aaa is the highest credit rating assigned by PhilRatings.

SMIC, which has investments in banking, real estate and retail, plans to spend between P94 billion and P98 billion in capital expenditures this year.

The group earlier allocated P80 billion to fund the shopping mall and residential projects of real estate subsidiary SM Prime Holdings Inc.

The conglomerate said it would strengthen its digital offerings to adapt to changing consumer behavior amid the coronavirus pandemic.

SM malls and retailers initiated click-and-collect, curbside pick-up, smartphone messaging communities for deliveries and concierge style personal shopping via social media in response to increased customer needs.

“We have been improving both our online and physical experience and operations across the group—and building new ways to serve customers: from banking, to retail, malls, and property,” SMIC vice chair Teresita Sy Coson said in July.

SMIC reported consolidated net income of P7.1 billion in the first half, down 69 percent from P23.0 billion in the same period last year.

Consolidated revenues decreased 21 percent in the six-month period to P185.5 billion from P233.7 billion a year ago.

The property and banking businesses accounted for 61 percent and 34 percent of SMIC’s net income, while retail contributed 5 percent.

Topics: Securities and Exchange Commission , SM Investments Corp. , bond shelf registration program
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