SM Prime sets interest rates for bond offer
Hopping mall operator SM prime holdings inc. on Tuesday said it has priced its p10-billion debt, which the company started offering to the public this week.
Sthe company said its 2.5-year peso-denominated series m retail bond is priced at 2.4565 percent while the 5-year series n bond is at 3.8547 percent.
Sm Prime issued an aggregate principal amount of P5 billion of the Series m and n bonds, with oversubscription option of an additional P5 billion. the retail bonds will be offered by Sm Prime to investors through underwriters from January 25 to 29, following the receipt of the permit to sell from the Securities and exchange Commission (SEC).
the retail bonds are set to be issued on February 5.
“the proceeds of the retail bonds will allow Sm Prime to continue its expansions plans in its core business, which will further drive the company’s growth,” said Sm Prime CFO John nai Peng C. ong.
Yield on Sm Prime’s paper are both higher than the current rates of government securities pegged at 2.073 percent for the 3-year paper and 2.533 percent for the 5-year debt.
the said offering is the second drawdown from Sm Prime’s P100-billion debt securities program under the shelf registration registered with the SEC.
BDO Capital and Investment Corp. and China Bank Capital Corp. were picked as joint issue managers for the deal. Both banks are also acting as joint lead underwriters together with BPI Capital, First metro Investment Corp. and SB Capital Investment Corp.
In march last year, just shortly after the declaration of lockdown in the country, Sm Prime was able to raise some P15 billion in fixed-rate bonds, with a tenor of 5 and 7 years.
the proceeds will primarily finance capital expenditures for new malls and expansion projects.
Sm Prime earlier said its income fell by half during the three quarters of the year ending September to P14.4 billion from P27.6 billion in 2019 still caused by the effects of the lockdown measures to contain the spread of Covid-19.
revenues reached P60.7 billion for the period, 29 percent lower from the previous year’s P85 billion, the company said.
“Sm Prime’s core businesses, primarily its malls, showed slight recovery as the government started to reopen more industries to help the economy going in to the second half of the year,” said Jeffrey C. lim, Sm Prime president.
“We have also implemented tighter controls on our expenses achieving a major reduction in operating expenses quarter on quarter. nevertheless, we continue to provide further assistance to our various stakeholders as well as to the programs led by the government in containing the spread of the virus and strengthening back our economy.”