SMC approves $3 billion medium term notes

Manila, Philippines — San Miguel Corp. has established a medium term note and securities program amounting to up to $3 billion with a group of foreign banks.

These are Australia and New Zealand Banking Group Ltd., Credit Suisse Singapore Ltd., DBS Bank Ltd., Mizuho Securities Asia Ltd., Standard Chartered Bank and UBS AG Singapore branch.

With the program, SMC may issue notes or perpetual capital securities in series or tranches amounting to up to $3 billion. 

“Net proceeds from the issuance of the instruments will be used by the corporation to finance its investments and various projects to refinance existing obligations and for general corporate purposes,” SMC said.

SMC plans to register the notes on the Singapore Stock Exchange. 

“There will be no public offering of instruments to be issued under the program in the Philippines or in the US. The principal amount and timing of the drawdown under the program are dependent on several factors including but not limited to market conditions and corporate needs of the corporation,” SMC said.

SMC needs to raise funds for its big-ticket infrastructure projects including its planned $15 billion Bulacan Airport.

Out of the $3 billion, SMC plans to issue an initial amount of $500 million in perpetual securities.

SMC said the program would allow it to tap the financial market for funding through the issuance of securities and other similar instruments at different currencies other than Philippine peso, whether considered debt or equity for accounting purposes.

The diversified conglomerate has been developing big ticket infrastructure projects such as the MRT-7 which will connect the existing MRT line to Bulacan.

On top of this, SMC also disclosed last year that is board of directors approved the shelf registration with the Securities and Exchange Commission of P60 billion in short term commercial papers.