SMDC raises P10 billion from corporate notes issue

MANILA, Philippines - SM Development Corp. (SMDC), the residential development arm of the SM Group, said it has successfully raised P10 billion from a recent corporate notes issue.

SMDC was originally looking to issue P5 billion but upsized it to P10 billion on strong demand. BDO Capital & Investment Corp. was the lead arranger.

The issue, which fetched a price of 6.75 percent for the three-year notes worth P2 billion and 7.73 percent for the five-year notes worth P8 billion, was more than three times oversubscribed by domestic institutional investors.

“The strong demand for SMDC’s corporate notes clearly indicates the trust and confidence investors have on the company, anchored on the fact that our balance sheet is still virtually debt-free. This highly encouraging market acceptance was brought about by SMDC’s sustained robust performance underpinned by its on-time delivery of five-star quality yet affordable residences at prime locations,” SMDC president Roger R. Cabuñag said.

Proceeds from the notes issue will be used for SMDC’s various land banking initiatives.

In the first quarter this year, SMDC reported a 51 percent jump in net earnings to P632 million, preselling a total of 3,547 units or 294 percent higher year-on-year. Total sales reached P7.2 billion, up 192 percent from the previous level.

SMDC has 12 ongoing residential projects, of which 11 are in key areas within Metro Manila, and one in the mountain resort city of Tagaytay

For this year, SMDC is launching four new projects which will entail between P4 billion and P8 billion in funding requirements. These new projects are located various strategic sites in Taft, Manila; Ortigas in Pasig City and Quezon City.

New projects would include the company’s foray into economic housing under the brand Myplace, whose initial project will rise on a one-hectare lot in front of the Danarra Hotel near the ABS-CBN compound. The pilot project will offer a total of 2,000 units with a size of 20 square meters each.

The other ongoing projects of SMDC are Chateau Elysee, a mid-rise condominium project in Parañaque City, which has completed five of its six clusters; Berkeley Residences in Kati-punan Road, Quezon City, which is 63 percent complete; Grass Residences beside SM City North Edsa, which is 58 percent complete with its Tower 1; Sea Residences near the Mall of Asia Complex in Pasay City, which is 38 percent complete with Phase 1; and Field Residences in Sucat, Parañaque, which is 95 percent complete with its Tower 1. Both Mezza Residences, which is just across SM City Sta. Mesa and Lindenwood Residences, a residential subdivision in Muntinlupa City, are 100 percent complete.