SMC raises P10 B from bond issue

San Miguel Corp. (SMC) successfully raised P10 billion from the sale of 2022 bonds, representing the second tranche of a P60-billion debt program registered under the Securities and Exchange Commission’s shelf registration facility.

SMC listed the bonds yesterday at the Philippine Dealing and Exchange Corp., the country’s fixed income exchange. It set the interest rate for the five-year bonds at 5.1923 percent per annum.

The first tranche, issued on March 1, comprised P20 billion in five, seven and 10year bonds.

Sergio Edeza, senior vice president and head of Treasury of SMC, said the remaining P30 billion would be issued in the future depending on market opportunities and the company’s financing needs.

Edeza said the company had 2.5 years to utilize the balance of the three-year P60 billion debt program.

“Proceeds of the bond offering will be used mainly to refinance our US dollar denominated debt,” Edeza said during the listing ceremony yesterday.

The company is working to refinance its remaining dollar debt of roughly $500 million.

Yesterday’s bond issue brought the San Miguel Group’s total share of listed issues to at least P110 billion, representing 15 percent of the overall outstanding corporate bonds at PDEx.

SMC reported a P52.2billion profit in 2016, up 80 percent from the previous year’s P28.9 billion on the back of higher revenues and better margins across its major businesses.

Excluding foreign ex- change losses of P8.9 billion, consolidated income reached P61.2 billion.

The year-to-date value of new listings at PDEx now stands at P61.2 billion, bringing the total level of tradable corporate debt instruments to P696.62 billion issued by 44 companies comprising 119 securities.

PDEx said it may surpass the P150 billion target it earlier set for new debt listings this year despite the US Federal Reserve’s move to hike interest rates which could eventually raise borrowing costs.