SMIC to issue $250 million bonds for debt refinancing

SM Investments Corp. said it would issue convertible bonds to refinance some of its maturing obligations and other general corporate purposes.

In a statement, SMIC said its board approved the issuance of five-year convertible bonds with a base size of $250 million. The conglomerate appointed Citigroup Global Markets Limited and J.P. Morgan Securities Ltd. as joint lead managers for the offering.

“The Board of Directors also authorized the management to negotiate and finalize the terms and conditions, including pricing and any increase in issuance amount, and execute any and all documents necessary, to implement the convertible bond issue,” SMIC said.

In November, the SM Group announced a capital expenditure budget of P56.8 billion this year, 32.3 percent higher than the previous year’s P43 billion, underscoring its commitment to expand despite concerns of a global economic growth slowdown.

Bulk of the capex or P26.9 billion will be earmarked for the property development group, including its residential arm SM Development Corp.

SM Prime Holdings Inc. will spend P20.9 billion, P12 billion of which will be allocated for construction of malls in the Philippines and P9 billion for its China expansion. The budget also includes initial spending for big projects in South Road Properties in Cebu and Taguig.

Capex of the retail group will reach P4.6 billion to cover the roll out of new stores and renovations, while the banking group will spend P3.4 billion for the upgrade its computer systems and branch expansion.

The hotels and conventions segment has earmarked P1.8 billion for the construction of Park Inn by Radisson in Davao and a Radisson Blu hotel in the Mall of Asia complex in Pasay City.

Its shares added P51.50 or 8.23 percent to close at P677 apiece on Thursday from P625.50 each on Wednesday.