SM Prime bond float to fund expansion

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SM Prime Holdings Inc., the property development arm of the Sy family, plans to expand its commercial and hotel operations from the proceeds of a P10-billion bond offer.

The company earlier said its board of directors approved the offering to the public of up to P60 billion worth of bonds, with an initial tranche of P10 billion.

The bonds will be filed under the Securities and Exchange Commission’s (SEC) shelf registration to be issued for a period of three years.

In its application with the SEC, the Henry Sy-led integrated property developer said that proceeds of the initial P10-billion bond float will be utilized to support its capital expenditures for the year.


Under this initial tranche, the company is issuing 10-year fixed rate debt paper, to be called Series F bonds, to be offered in minimum denominations of P20,000 and thereafter in multiples of P10,000.

The principal amount will be P5 billion which may be augmented by another P5 billion should oversubscription take place upon its offered date.

SM Prime said it wants to expand its commercial and hotel operations and has earmarked some P2.42 billion for its commercial projects such as SM Clark BPO towers, SM Sta. Rosa BPO and SM Iloilo.

For its hotel projects, it allocated some P2.07 billion mainly for Conrad Manila, SMX Conventions in South Road Properties in Cebu, SM Hotels in North Edsa, SM Hotels in Mall of Asia and MOA Serviced Apartment.

It has also allocated some P2.87 billion to finance the construction of Three, Four and Six E-Com Centers, SRP Cebu-Building 1 and Cyber Building 1.

“Any shortfall in the net proceeds for the intended uses… shall be funded by the issuer from internal sources such as cash flows generated from operations and/or availments from credit facilities provided to the issuer [SM Prime] by various financial institutions,” it said.

The company earlier said it was looking at a capital expenditure of P180 billion for the next three years to bolster growth.

It targets to double net income to P32 billion by 2018 from P16 billion in 2014 after the consolidation of the property business of the SM Group of companies under the listed SM Prime.

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