SM Prime sets rates for P20 billion bond issue

MANILA, Philippines — SM Prime Holdings Inc. is beefing up its war chest as it gears for the development of new malls and other property projects including its 600-hectare reclamation plan in Pasay.

The company is issuing up to P20 billion in fixed rate bonds and has set the interest rates at 4.8643 percent and 5.0583 percent per annum for the five-year and seven-year bonds, respectively.

The amount is the initial tranche of a planned P100-billion borrowing over a three-year period.

The bonds are set to be issued on March 25.

The offer size is P15 billion, with an option to issue an additional P5 billion.

“SM Prime is set to establish further integrated property developments in various developing provincial cities in the Philippines. The proceeds from the retail bond will enable the company to pursue it expansions plans for its core businesses, primarily of its malls projects, which is one of the main growth drivers of the company,” Lim said.

This series of SM Prime bonds due on 2025 and 2027 is the seventh offering of peso-denominated retail bonds to the public.

Similar to its previous bond issues, the SM Prime Series K and L bonds have been rated PRS Aaa by local debt watcher Philippine Rating Services Corp. (PhilRatings). A rating of PRS Aaa is the highest rating assigned by PhilRatings.

This rating is given to long-term debt securities with the smallest degree of investment risk. This also indicates SM Prime’s strong capability to meet its financial commitment.

SM Prime tapped BDO Capital & Investment Corp. and China Bank Capital Corp. as joint issue managers. They are also acting as joint lead underwriters and joint bookrunners together with BPI Capital Corp., EastWest Banking Corp., First Metro Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp.