MANILA, Philippines – The Securities and Exchange Commission (SEC) has given its go-signal to SMC Global Power Corp. to issue P15 billion in bonds.
The power generation arm of diversified conglomerate San Miguel Corp. plans to issue the bonds on July 8, with the offer period targeted from June 27 to July 1, company sources said in a separate interview.
The fixed rate bonds would be issued in five, seven and 10-year terms at P5 billion per series.
Proceeds would be used to finance a short-term loan extended by BDO Unibank for the redemption of $300 million corporate notes maturing this year.
The company received a PRS Aaa rating from Philippine Rating Services Corp. (PhilRatings), the highest rating given by the debt watcher, which indicates minimal credit risk and the issuer’s extremely strong capacity to meet its obligations.
With SMC Global’s bonds, the country’s fixed income market can expect two major issuances next month or soon after president-elect Rodrigo Duterte takes his oath on June 30 on the back of a more bullish outlook on the economy which is now back in the sweet spot.
The other issuer is Ayala Corp., the country’s oldest conglomerate.
Ayala Corp. chief finance officer TG Limcaoco has said the company is targeting to issue P10 billion worth of bonds on July 1.
The conglomerate recently received the top nod of the Insurance Commission (IC) to consider the bonds as allowable asset of insurance and pre-need companies.
“This shall be considered reserve investment subject to the limitations set forth in the New Insurance Code,” the IC said.
Ayala Corp’s P10 billion bonds will mature in 2023.
The company is targeting to start offering the bonds to investors this week up to June 24.
The conglomerate also received the top PRS AAa rating from PhilRatings.
The company’s board earlier approved the filing with the SEC of a shelf registration of P20 billion bonds.
In industry parlance, shelf registration is an option for issuers to register and sell under the same regulatory documents securities which they do not intend to sell right away. The SEC allows for a three-year window.
The bonds shall be issued for a minimum of P50,000 and in multiples of P10,000.
For the first tranche, the net proceeds of P9.9 billion would be used to refinance the company’s maturing peso-denominated debt obligations.