SMIC's P15-billion bond issue gets top mark

MANILA, Philippines - SM Investment Corp.’s proposed P15-billion bond issue (including an oversubscription of up to P5 billion) has obtained a PRS Aaa rating from the Philippine Rating Services Corp.

The rating for SMIC’s outstanding P10 billion bonds was likewise retained at PRS Aaa, the highest rating on PhilRatings’ scale.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk as the issuer’s capacity to meet its financial commitment on the obligation is extremely strong.

In issuing the rating, PhilRatings took into account SMIC’s diversified portfolio, which includes core companies with strong market position, sustained earnings and recurring cash flows; its solid brand equity and experienced management team; strong liquidity; and sound capitalization.

PhilRatings likewise considered the continued positive prospects for the local economy and the industries where the SM Group has primary investments, in particular.

From the first ShoeMart store which opened in 1958, the SM Group has since evolved into a group of companies with five core businesses: shopping mall development and management (SM Prime), retail (SM Department Stores, SM Supermarkets, SM Hypermarkets and SaveMore stores), financial services (BDO Unibank, Inc. and China Banking Corp.), real estate development and tourism (SM Land Inc., SM Development Corp., Costa Del Hamilo Inc. and Highlands Prime Inc.), and hotels and conventions (SM Hotels, SMX Convention Specialists, Hotel Specialists - Tagaytay, Cebu and Pico).

“Growth has been aggressive, but has also remained focus on keeping market leadership and maximizing synergies within the group. The SM Group continues to look for opportunities and acts accordingly when such opportunities arise,” PhilRatings noted.

PhilRatings said the SM Group’s strategy of offering basic goods and services to the mass market places SMIC in a better position to ride out economic downturns.

SM Prime is the country’s leading shopping mall developer and operator with a total of 41 malls across the country as of end-2011.

SM Department Stores serve millions of customers through 41 stores throughout the country.

BDO Unibank Inc., on the other hand, has one of the largest distribution networks among domestic banks, with more than 740 operating branches and over 1,600 automated teller machines (ATMs) nationwide.