SMIC to issue R50-billion bonds

SM Investments Corporation (SMIC), the flagship of the Sy family, is planning a shelf registration of around R50 billion worth of bonds with the initial tranche to be issued before the end of this year.

In an interview during the launch of the Sy-donated R100million Miriam College Henry Sy Sr. Innovation Center, SMIC chief finance officer Jose Sio said “there’s a plan to issue retail bonds before the end of this year. It’s still being worked on and subject to SEC and PSE approval.”

He said the funds raised from the bonds will be used for SMIC’s investment purposes. However, this will be different from the bonds of subsidiary SM Prime Holdings Inc.

“It will be more for supporting our subsidiaries or the capitalization of our subsidiary or the expansion of our subsidiary. And we also have a group, the non-core business group for investments,” Sio explained.

Sio said the bonds will have tenors of about 7 and 10 years, noting that the Philippine capital market is liquid.

SM posted an 11 percent improvement in consolidated net income to R15.0 billion for the first half of the year. Excluding extraordinary items, recurring income grew by 8 percent.

Consolidated revenues rose 8.5 percent to R151.1 billion in the first half from R139.2 billion in the same period last year.

“Our strong first half performance reflects continued economic growth, boosted in part by election spending. We continue to focus on cost efficiencies and operating margin improvements,” SM President Harley T. Sy said.

He added that, “with the merger of our retail businesses we now cater to a much wider range of consumer needs and we look forward to benefiting from increasing consumer spending.”

During the period, the property business contributed the most to consolidated net income at 41 percent. This was followed by banks with 38 percent and retail with 21 percent.