IN THIS ISSUE SM Investments to offer 7-, 10-year dollar bonds

Citi, JP Morgan, Deutsche Bank named underwriters

TYCOON Henry Sy-led SM Investments Corp. plans to return to the offshore bond market with the offering of seven- and 10-year US dollar bonds.

In a disclosure to the Philippine Stock Exchange yesterday, SMIC said it had appointed Citi, JP Morgan and Deutsche Bank to jointly underwrite the offering.

“The offering is a debt management exercise which aims to further lengthen the company’s debt profile and take advantage of the much improved interest rate environment,” the company said in the disclosure.

The company's board authorized the management to negotiate and finalize the amount, terms and pricing of the bond issue subject to the prevailing market conditions.

“The amount and interest of the US dollar bond (are) still to be discussed and determined by the management in discussion with the underwriter banks,” SM chief finance officer Jose Sio said.

“The new issue is a straight bond issue,” said SM investor relations chief Cora Guidote.

The last time SMventured into the overseas bond market was in February this year, but that involved a convertible bond issue. SM raised $250 million from the sale of offshore five-year bonds which investors can trade into equity. This was the first convertible bond (CB) offered out of the Philippines this year.

Before the convertible bond offering, SM did a $400-million issue and bond exchange in 2010 likewise to lengthen maturity. That issue was the first liability management transaction by a Philippine corporate issuer and, at the time of issue, featured the lowest yield for a Philippine corporate issue of any maturity.

SMIC, through various subsidiaries, is the dominant player in Philippine banking, shopping mall and retailing businesses as well as a fast-growing player in residential condominium and hotel/convention center development.