SM Investments lists P15 billion fixed–rate bonds

MANILA, Philippines — SM Investments Corp. (SMIC) listed its P15-billion fixed-rate bonds at the Philippine Dealing and Exchange Corp. (PDEx) yesterday, its biggest issue since 2016, following a hugely successful offering.

Investors snapped up the bonds after the offering closed last Feb. 11, a strong testament to investor confidence on SM’s credit standing, the company said.

The retail bond offering was 3.7 times oversubscribed to as much as P55 billion.

“We are pleased with the response to our bond issue. The hefty investor appetite for these securities was on the back of volatility around local interest rate sentiment with expectations of the US Federal Reserve hiking rates,” SMIC president and CEO Frederic DyBuncio said.

“This exercise mirrors investor confidence on SM’s credit quality and overall prospects for growth while increasing our funding flexibility and enhancing capital efficiency,” he said.

The offer size was P10 billion with an option to increase by up to P5 billion. The company set the interest rates for the Second Tranche Bonds Series I, three-year retail bond at 3.5915 percent due on 2025, and Series J, five-year retail bond at 4.7713 percent due on 2027.

The offering, which started on Feb. 7, forms part of SMIC’s second tranche of P30 billion in debt securities registered with the SEC under a shelf registration.

As part of the company’s growth funding strategy, the net proceeds of the bond issue will be used to refinance debt that funded capital expenditure.

The bonds have been rated PRS Aaa, with Stable Outlook by PhilRatings, the highest quality rating with minimal credit risk.