SMPH prices planned P35-b bond offering

PROPERTY developer SM Prime Holdings Inc. set the interest rates for its planned P35billion peso-denominated fixed-rate bond offering.

SMPH said in a stock exchange filing Thursday the P35-billion bond offering in three tranches would consist of P25 billion as the base offer and additional P10 billion for oversubscription.

The interest rate for Series S is at 6.2069 percent per annum due 2025, Series T at 6.2151 percent per annum due 2026 and Series U at 6.3275 percent per annum due 2029, it said.

The offering period will be from May 8 to 12, 2023. The bonds will be issued and listed on the Philippine Dealing & Exchange Corp. on May 23.

SMPH chief finance officer John Nai Peng Ong said the company would use the proceeds to finance expansion plans.

“The fifth tranche of SM Prime’s P100-billion debt securities program will be used in pursuance of our expansion plans that will provide the company a stronger foothold in the key areas of the country,” Ong said.

SMPH earlier said it would spend P80 billion in capital expenditures this year to build more malls and residential projects.

The Series S, T and U received a rating of PRS Aaa from Philippine Rating Services Corp.

PRS Aaa rating is the highest rating assigned by PhilRatings, denoting that such obligations are of the highest quality with minimal credit risk and the issuing company ‘s capacity to meet its financial commitment on the obligations is extremely strong.

The bonds will be made available to investors through joint issue managers BDO Capital & Investment Corp. and China Bank Capital Corp., which are also joint bookrunners and joint lead underwriters.

SMPH tapped BPI Capital Corp., EastWest Banking Corp., First Metro Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp. as joint underwriters for the transaction.

SMPH earlier disclosed plans to raise a record $1 billion from its real estate investment trust offering in the second half of 2023.

SMPH president Jeffrey Lim said the company had started the process of incorporating an REIT unit that would initially own 12 to 15 malls in the Philippines.

“Hopefully we can launch the REIT by second half of the year subject to market conditions,” Lim said.

SM Prime owns 82 malls in the Philippines and seven malls in China. Of the 82 Philippine malls, 30 to 35 are fully mature, according to the company.

“We can initially transfer 12 to 15 mature malls into the REIT, and then the rest will be for the future for the growth of SM REIT,” Lim said.