SMC Global starts P20-B bond offer

MANILA, Philippines — SMC Global Power Corp., the power generation arm of San Miguel Corp., will start offering P20 billion worth of fixed-rate bonds next month.

According to documents submitted to regulators, the offer period will run from Nov. 13 to 22, while the listing of the bonds on the Philippine Dealing and Exchange Corp. is on Nov. 29.

The deadline, meanwhile, for institutional investors to place their orders is on Nov. 9.

The bonds are composed of a five-year series due 2022, seven-year series due 2024 and 10-year series due 2027, with interest on the bonds to be paid quarterly.

 SMC Global tapped BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., PNB Capital and Investment Corp., RCBC Capital Corp. and Standard Chartered Bank as joint lead underwriters and book runners.

 SMC Global Power, together with its subsidiaries, is one of the largest power companies in the Philippines, controlling 3,063 megawatts of combined capacity as of June 30, 2017.

Philippine Rating Services Corp. has assigned its highest issue credit rating of PRS Aaa, with a stable outlook, to SMC Global’s proposed P20 billion in fixed-rate bonds.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk and the obligor’s capacity to meet its financial commitment on the obligation is extremely strong.

 On the other hand, a stable outlook means “the rating is likely to be maintained or to remain unchanged in the next 12 months.”

In issuing the rating, PhilRatings considered SMC Global’s key strengths -- dominant market position, with a solid platform for expansion and its strong parent company support and synergies derived from the San Miguel Group.

It likewise took into consideration the company’s long-term offtake contracts with customers, which provide stability in terms of revenues and cash flows.