SMIC retail bond offer 2X oversubscribed

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To issue P20-B bonds Friday

SM Investments Corp. (SMIC) saw its fixed rate bond offering oversubscribed two times on the back of strong demand, prompting the Sy-led conglomerate to exercise its oversubscription option.

SMIC said the Series G retail bonds “was met by strong demand from a wide spectrum of investors ranging from individuals in the retail market to banks, investment funds, pension funds, insurance companies and other corporates.”

The base offer was worth P15 billion while the oversubscription option amounted to P5 billion. The Series G bonds are set to yield 5.1590 percent per year and will mature by 2023. The offer period was from November 25 to December 2. The bonds will be issued today, December 9.


The P20-billion bond offer is part of SMIC’s P50-billion bond issue under shelf registration with the Securities and Exchange Commission. The remaining P30 billion worth of bonds will be issued within a span of three years.

SMIC has said proceeds of the P50-billion bond program will go to financing future investments and strategic acquisitions within SMIC’s core businesses in property, retail and banking segments.

The bonds were rated PRS Aaa by Philippine Rating Services Corp. (PhilRatings), the highest rating assigned by PhilRatings. The rating is given to securities with the highest quality and minimal credit risk.

BDO Capital & Investment Corp. and China Bank Capital Corp. are the joint issue managers of the transaction, which are also acting as joint lead underwriters and joint bookrunners together with BPI Capital Corp. and First Metro Investment Corp. SB Capital Investment Corporation is a co-lead underwriter for the bond issue.

Based on the P20-billion bond issue’s prospectus, SMIC said 70 percent of the net proceeds will be disbursed from the fourth quarter of 2016 to the first quarter of 2017, while the rest will be utilized up to the end of the second quarter of 2017

SMIC is owned by Henry Sy, the richest man in the Philippines. The company holds Sy’s main businesses in retail (SM Retail Inc.), real estate (SM Prime Holdings Inc.), and banking (BDO Unibank Inc.), while also having non-core businesses through investments in mining, entertainment, and tourism.

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