SM Prime fixes rate for P25-B bond offer

MANILA, Philippines - SM Prime Holdings Inc., the integrated property firm of the country’s richest man Henry Sy, has finalized the interest rates for its P25-billion maiden bond offering.

In a disclosure, SM Prime said the bonds will be offered to investors from Aug. 13 to 22, with issuance scheduled on Sept. 1.

The 5.5-year Series A retail bonds will carry an interest rate of 5.1 percent per annum; the seven-year Series B bonds will yield 5.2006 percent; and the 10-year Series C retail bonds will have an interest rate of 5.7417 percent.

“SM Prime will issue an aggregate principal amount of P15 billion of the Series A, Series B and Series C bonds, with an option to issue an additional amount of up to P10 billion,” the company said.

The maiden bond offering was approved by the Securities and Exchange Commission last week.

SM Prime’s bonds secured the top PRS Aaa rating from Philippine Rating Services Corp. (PhilRatings).

“Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” PhilRatings said.

“The net proceeds are intended to be used for capital expenditures for the expansion of malls, officer and hotel operations,” SM Prime said.

Specifically, the fresh capital will allow SM Prime to complete the construction of SM City Seaside Cebu, SM City Angono, SM Butuan, SM Cagayan de Oro, SM City San Mateo, SM City Bacolod, SM City Lipa, SM City Sta. Rosa and The Block in SM City North Edsa. It will also start the construction of shopping malls in Quezon City, Cabanatuan, Caloocan, Tacloban, Dagupan, Cavite and Puerto Princesa.

For the office segment, the company is building the Five E-Com Center, Three E-Com Center, and commercial buildings in Makati, Iloilo and Mall of Asia.

On the hotel side, SM Prime will use part of the proceeds for the construction of Conrad Hotel Manila and Park Inn by Radisson branches in Clark, Mall of Asia and Iloilo.

SM Prime, one of the leading integrated property development companies in Southeast Asia, also posted double-digit profit growth in the first half.

First-half net income improved 12 percent to P9.8 billion while revenues picked up seven percent to P33.42 billion on the back of strong rental and residential revenues.

SM Prime is doubling its income and revenues in the next five years as it grows its office, mall, leisure, hotel and residential portfolio two-fold in the same period. It allotted P400 billion in the medium term to support its expansion in the Philippines, China and Southeast Asia.