SM Prime targets bond issue in July

MANILA, Philippines - Integrated property company SM Prime Holdings Inc. (SMPH) is targeting to issue its 10-year bonds worth  up to P10 billion on July 25, according to documents related to the offer.

The offer period has been set from July 12 to July 18 while the rating-setting date will be on July 7, the documents also showed.

Company officials, however, said the timetable is still subject to change depending on regulatory approvals.

SMPH plans to issue P5 billion in retail bonds, with an oversubscription option of P5 billion. This will be the initial tranche of a proposed three-year debt program worth as much as P60 billion.

The company has received the highest debt rating of PRS Aaa for its proposed P5 billion worth of 10-year bond issue from local debt watcher Philippine Rating Services Corp.

PhilRatings likewise maintained its rating for SMPH’s outstanding bonds worth P40 billion.

“The rating for SMPH’s outstanding bonds amounting to P40-billion was likewise maintained at PRS Aaa. PhilRatings assigned a stable outlook for the ratings of the proposed and outstanding bonds,” SMPH also said.

PRS Aaa is the highest rating assigned by PhilRatings, denoting 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.

Proceeds of the fund raising activity would be used for the company’s capital expenditure requirements.

The company is on track to doubling its income to P32 billion by 2018 from P28.3 billion in 2015.

In the first quarter of the year, SMPH posted a net profit of P5.8 billion, 54 percent lower compared to P12.63 billion recorded a year ago. This takes into account a P7.4-billion one-time trading gain on marketable securities booked in the first quarter of 2015.

Without the extraordinary items, core net income grew 12 percent in the first three months of the year, supported by a 10 percent increase in revenues to P18.2 billion from P16.7 billion.

To date, SM Prime has a total of 57 malls in the Philippines and six in China with total retail space of 8.4 million sqm. This includes the newly-opened SM City San Jose del Monte in Bulacan.