SMIC plans new issue of P50-B retail bonds

SM Investments Corp. ( SMIC) is eyeing to raise about P50 billion through a new retail bond offering this year to fund general corporate requirements and expansion plans, a ranking official said yesterday.

“There’s a plan to issue retail bonds before the end of this year. It is still being worked out and will be subject to regulatory approvals,” said SMIC chief finance officer Jose Sio on the sidelines of the grand launch of the Miriam CollegeHenry Sy Sr. Innovation Center Wednesday.

The amount is still being finalized but the offering could fetch around P50 billion, Sio said.

Sio said the bonds might have a tenor of seven to 10 years given ample liquidity in the market.

Sio said funds from the issue would largely go to the expansion of the group’s various businesses.

He said the company might apply for a shelf registration with the SEC for the planned bond issue.

Under shelf registration, issuers have the option to register and sell issues under the same regulatory documents securities which they do not intend to sell right away.

This means the issuers can time their capital raising activities as they are needed or when market conditions favor them.

Analysts said issuers are scrambling to complete their fund raising activities given a looming US Federal Reserve hike in December.

SMIC reported a consolidated net income of P15 billion in the first half of the year, 11 percent higher than the year earlier on strong economic growth, buoyed by election spending during the period.

Consolidated revenues grew eight percent to P151.1 billion.

All business segments – retail, banking and property – contributed to the growth. The property business through SM Prime Holdings contributed the biggest chunk at 41 percent followed by banks at 38 percent and retail with 21 percent.