SY-LED conglomerate SM Investments Corp. (SMIC) has set a coupon rate of 5.1590 percent for its seven-year bond offer of up to P20 billion.
In a disclosure to the Philippine Stock Exchange, the company said its seven-year Series G bonds will have a fixed yield of 5.1590 percent per year with a base offer amounting to P15 billion and an oversubscription option of P5 billion.
The P20-billion bond offer is a part of SMIC’s P50-billion fixed rate bond program under shelf registration with the Securities and Exchange Commission. The remaining P30 billion worth of bonds will be issued in several tranches within three years.
“Net proceeds of the issue of approximately P14.866 billion, assuming an issue size of P15 billion, or P19.826 [billion]if the oversubscription option is exercised, shall be used to finance investments and strategic acquisitions,” SMIC said in its prospectus.
SMIC adjusted the offer period to November 25 to December 2. It had originally set the ofer period from November 23 to 29. The bonds are set to be issued on December 9.
The company said this is their fourth retail bond offering, and like previous issuances, the P20-billion bonds was rated PRS Aaa by Philippine Rating Services Corp. (PhilRatings).
PRS Aaa is the highest rating assigned by PhilRatings, referring to long-term debt securities with the smallest degree of investment risk due to the company’s strong capacity to meet financial obligations.
BDO Capital & Investment Corp. and China Bank Capital Corp. are the joint issue managers of the transaction and 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 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.