SM board approves P50-B bond issue

SM INVESTMENTS Corp. on Wednesday said it has received board approval for a P50-billion shelf offering with an initial issue planned later this year.

In a statement, the holding firm of the country’s richest man Henry Sy, Sr. announced its board of directors approved a threeyear debt program comprising P50 billion worth of fixed- rate bonds.

SM is looking to issue the first P15 billion of the retail bonds along with an oversubscription option for P5 billion later this year.

The company’s board authorized the management to negotiate and finalize the terms and conditions, including the pricing, tenor and any increase in the offering.

“We are not issuing these bonds yet, so [it’s] too early to say where proceeds will be used,” SM Senior Vice-President for Investor Relations Corazon P. Guidote said in a mobile phone message.

Ms. Guidote, however, confirmed the P50-billion shelf offering will comprise the proposed retail bonds that SM Executive Vice-President, Chief Financial Officer and Corporate Information Officer Jose T. Sio told reporters about last Sept. 7.

Mr. Sio had revealed plans to raise P50 billion by issuing retail bonds under a three-year shelf registration with the Securities and Exchange Commission to capitalize and expand its noncore businesses, among others.

SM maintains interests largely in the banking, property and retail businesses. It has investments in the power, gaming and mining sectors as well.

The conglomerate’s property arm SM Prime Holdings, Inc. is implementing a similar debt program. It has registered P60 billion worth of fixed- rate bonds and issued P10 billion so far.

SM Prime Executive VicePresident and Corporate Information Officer Jeffrey C. Lim had expressed the company’s intention to issue the second tranche of the peso-denominated bonds within the first quarter of next year.

Mr. Sio had revealed that SM deliberately stacks cash in order to have the capacity to grab opportunities as they arise.

The holding firm has been implementing expansion plans across its businesses both in the Philippines and abroad to further improve its profitability.

In the first six months, SM booked an 11% year-on-year increase in consolidated net income to P15 billion from P13.5 billion. This followed an 8.5% improvement in revenues to P151.1 billion from P139.2 billion.

Shares in SM closed P11.50 or 1.72% lower at P656.50 apiece on the Philippine Stock Exchange on Wednesday. —