SM Prime P25-B bond offer gets SEC approval

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SM Prime Holdings Inc. has obtained approval from the Securities and Exchange Commission (SEC) to proceed with its P15-billion bond offering, with a subscription option of P10 billion.

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The SEC on Thursday approved SM Prime’s P25-billion debt sale to partly fund the company’s five-year expansion plan.

The P25-billion fundraising plan is the “first and largest” of SM Prime to date, according to SM Prime Chief Financial Officer Jeffrey Lim.

He said the P24.784 billion net proceeds after listing-related deductions will help finance the company’s expansion, as a part of its five-year roadmap.

The bond will be issued in scripless form in denominations of P20,000 each and in multiples of P10,000 thereafter. It will be listed on the state-run Philippine Dealing and Exchange System’s secondary market.

The issue will be divided into three sets: Series A bonds with five years and six months’ tenor carrying 4.5479 percent to 5.5479 percent interest yearly; Series B bonds maturing within seven years with 4.8013 percent to 5.8013 percent rates; and Series C bonds to expire 10 years from issue date, carrying between 5.15 percent and 6.15 interest.

Joint lead underwriters are BDO Capital and Investment Corp., BPI Capital Corp., China Banking Corp. and First Metro Investment Corp.

The bonds were rated PRS Aaa by PhilRatings, the highest rating for bonds with minimum credit risk.

SM Prime’s five-year plan aims to double 2013 net income and revenues by spending P400 billion in capital expenditure (capex), also to double the existing number of malls, offices, hotels and other leisure-related developments by December 2018.

To date, SM Prime had already utilized 25- to 30- percent of the P60.9-billion capex alloted for this year, in line with the P400-billion capex set in the five-year blueprint.

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