Philippine property developer SM Prime Holdings Inc is eyeing to raise up to $426 million (P20 billion) in its retail bonds offer, setting its interest rates on Wednesday.
The company priced its peso-denominated 5.25-year retail bonds to crop 4.5095 per cent yearly, while its 10-year bonds were priced to yield 4.7990 per cent yearly.
SM Prime will issue an aggregate principal amount of P15 billion of the Series D and Series E retail bonds, with an option to issue an additional amount of up to P5 billion.
The company began to offer the bonds to investors via underwriters yesterday, which will end on November 13, 2015. The retail bonds are set to be issued to the bondholders on November 25, 2015.
SM Prime president Hans Sy said proceeds of the retail bond would be mostly used to the mall expansions and refinance loans of the company. By the end of 2015, SM Prime will increase its number of malls to 55 in the Philippines with an equivalent mall footprint of 7.3 million square meter in terms of gross flooarea (GFA).
On 2016, SM Prime will open six new malls and expand two existing malls by 571,631 square meters combined.
“The retail bond to be issued by SM Prime will largely support funding for our mall expansion
programs in the coming years. This is a testament to management’s confidence that the economic growth of the Philippines will be sustained over the medium term and will eventually have a positive impact on the provinces as growth spreads to these areas,” Sy said.
This series of SM Prime bonds due 2021 and 2025 is the second offering of Peso-denominated retail bonds to the public, subsequent to its successful maiden issue of P20 billion in 5.5, 7-year, and 10-year bonds in 2014.
Like its previous bond issue, the SM Prime Series D and Series E retail bonds have been rated PRS Aaa by Philippine Rating Services Corporation (PhilRatings), the highest rating the latter has assigned. A rating of PRS Aaa is assigned to long-term debt securities with the smallest degree of investment risk, and denotes that SM Prime’s repayment capacity is extremely strong.
The bonds’ joint issue managers and joint bookrunners are BDO Capital & Investment
Corporation, China Banking Corporation and First Metro Investment Corporation, which are also
acting as joint lead underwriters together with BPI Capital Corporation, PNB Capital and Investment Corporation, United Coconut Planters Bank, SB Capital Investment Corporation, East West Banking Corporation, RCBC Capital Corporation, Land Bank of the Philippines and Philippine Commercial Capital, Inc. are participating underwriters for the bond issue.