SMC Global Power to issue $300 million perpetual securities

MANILA, Philippines — SMC Global Power Holdings Corp., the power unit of San Miguel Corp., is eyeing the issuance of another round of perpetual securities amounting to at least $300 million.

The company has secured board approval to issue additional undated senior perpetual capital securities.

It said the issuance being eyed is “at least $300 million or such other amount as management may later determine, subject to prevailing market conditions and as may be advantageous to the corporation.”

SMC Global said net proceeds would be used and applied by the corporation primarily for the repurchase, refinancing and/or redemption of existing undated subordinated capital securities, for investments in liquefied natural gas (LNG) facilities and related assets or for general corporate purposes.

The company is in advanced stages of executing the binding terminal use agreement term sheet for the proposed LNG terminal in Batangas, with AG&P to provide receiving, storage and regasification services to the Ilijan power plant.

It has negotiated “priority status” for the Ilijan LNG terminal over all projects of AG&P LNG projects.

The additional securities shall be consolidated and form a single series with its existing $400 million undated senior perpetual capital securities issued last October.

For this issuance, SMC Global engaged Credit Suisse (Hong Kong) Ltd., DBS Bank Ltd., Standard Chartered Bank and UBS AG Singapore Branch as joint lead managers, DB Trustees (Hong Kong) Ltd. as trustee and Deutsche Bank AG, Hong Kong branch as paying agent and Latham & Watkins as listing agent.

Apart from the $400 million issuance, the company already raised $600 million in January from the issuance of senior perpetual capital securities in Singapore with an initial rate of distribution of 5.7 percent per annum.