SM Prime set to issue up to P60 B retail bonds

MANILA, Philippines – SM Prime Holdings Inc. will issue up to P60 billion worth of retail bonds over a period of three years, with the initial tranche comprising P5 billion worth of 10-year bonds.

The company has filed a shelf registration statement with the Securities and Exchange Commission (SEC).

A shelf registration is an option for issuers to register and sell under the same regulatory document securities, which they do not intend to sell right away. This affords the issuer companies the flexibility when to offer and sell securities within the three-year period.

Of the P60 billion, the initial tranche will be P5 billion with an oversubscription of P5 billion.

The company has yet to finalize the terms and conditions of the offer, including pricing, tenor and any possible increase in issuance amount.

Proceeds from the bond issue will be used for the company’s capital expenditure requirements.

The company is on track to doubling its income to P32 billion by 2018 .

In the first quarter, SMPH posted a net profit of P5.8 billion or 54 percent lower than the year earlier figure, which was boosted by a P7.4 billion one-time trading gain on marketable securities.

Without the extraordinary items, core net income rose 12 percent, supported by a 10 percent increase in revenues to P18.2 billion.

To date, SM Prime has a total of 57 malls in the Philippines and six in China with total retail space of 8.4 million square meters.  It recently opened SM City San Jose del Monte in Bulacan, with a gross floor area of 101,000 sqm.

The company is set to open four more malls this year namely, SM City Trece Martires, SM City East Ortigas, Cherry SM Congressional and Cherry SM Antipolo.

SM Prime also intends to expand its existing malls – SM City Calamba and SM City Naga.