San Miguel Food & Beverage Inc (SMFB), the food unit of conglomerate San Miguel Corporation (SMC), is raising as much as 15 billion pesos ($295 million) from a new retail bond offering, according to the company’s disclosure on Monday.
The Philippine-listed subsidiary of SMC said the bonds will be issued on March 10 and will be comprised of five-year Series A Bonds due 2025 with a fixed interest rate equivalent to 5.05 per cent per annum, and seven-year Series B Bonds due 2027 with a fixed interest rate of 5.25 per cent per year.
The bond offer has received the approval of the Securities and Exchange Commission (SEC), San Miguel F&B said in a disclosure to the Philippine Stock Exchange.
The bonds shall be issued in minimum denominations of 50,000 pesos ($983) each, and in integral multiples of 10,000 pesos ($197) thereafter. They will be listed and traded in denominations of 10,000 on the Philippine Dealing & Exchange Corp.
The bonds have been rated PRS Aaa by the Philippine Rating Services Corporation (PhilRatings) last December. PRS Aaa is the highest rating by PhilRatings
The listed firm, which revealed its plan to float bonds in November, said it will use the proceeds to settle maturing loans by March 12.
SMFB posted consolidate revenues of 226.36 billion pesos ($4.4 billion) in the first nine months of last year, up 10 per cent over the same period in 2018. Total food revenues increased by 6 per cent to 101.05 billion pesos ($1.98 billion) while its beer business posted 103.88 billion pesos ($2 billion) of revenue, up 11 per cent from the previous period.
“We are committed to delivering strong financial returns over the long-term through our diversified and sustainable portfolio of businesses,” said Ramon S. And, SMFB President and CEO, in an earlier announcement.
Last month, listed food giant Jollibee Foods Corporation completed its dollar bond market debut with the issuance of $600-million guaranteed senior perpetual capital securities.
The transaction marked the first-ever bond or perpetual securities issuance from Jollibee and the first time that the company has tapped the capital markets since its initial public offering in 1993. The issuance is one of the first by an Asian restaurant company.
Jollibee said proceeds from the offering are intended primarily to refinance the short-term debt from the acquisition of International Coffee and Tea, owner of American specialty coffee and tea brand The Coffee Bean & Tea Leaf. The Filipino company acquired 100 per cent of the US firm for $350 million, its biggest multinational acquisition so far.