SM Investments Corp. (SMIC), the listed investment holding firm of the family of retail tycoon Henry Sy, successfully raised $350 million from a recent offering of three-year fixed-rate bonds.
“We are very pleased with the outcome of the issue at the back of a very cautious investment environment. We thank the investors for supporting SM and for their confidence that we will deliver on our medium to long-term plans, keeping in mind the challenges that the global environment presents to all of us,” said SMIC president Harley Sy.
The bonds were priced at a fixed rate of 6.75 percent following an international roadshow in Hong Kong, Singapore and London. UBS is the sole bookrunner of the issue.
“This was another landmark deal for SM as it is the largest offering to come out from a Philippine corporate, fetching one of the lowest yields. This is also the first successful international corporate bond offering coming out of the Philippines in over two years. The issue was unrated and launched at a time when the market environment is turbulent,” SMIC said in a statement issued yesterday.
SMIC intends to use the proceeds from the bond issue to refinance a portion of its maturing obligations, the expansion of its hotel and commercial businesses and to fund general working capital requirements.
As of end-May 2008, SMIC’s net debt stood at P22 billion.
SMIC is one of the largest holding companies in the Philippines with a market capitalization of $3.3 billion as of end-June 2008. It is engaged in four businesses through its subsidiaries — shopping mall development and management (SM Prime Holdings Inc.); retail merchandising (SM Department Stores); financial services (Banco de Oro and China Banking Corp.); and real estate development and tourism (SM Development Corp. and Highlands Prime Inc.).
The company has earmarked P26.9 billion this year to bankroll the expansion of its retail, banking, shopping mall and real estate operations. Bulk of the allotted capital, or P15.6 billion, will be channeled to the group’s real estate development business while P6 billion will be used to boost its shopping mall network nationwide. Another P3.8 billion will go to the expansion of the group’s financial services business and P1.5 billion for the construction of supermarkets and hypermarts .
SMIC had earlier said two-thirds of the capital requirements needed for the expansion of the group’s core busineses will be funded by internally-generated cash while the balance will come from borrowings
Janice Hidalgo