SM Investments Corp. (SMIC), the holding firm of the Sy family, on Monday said it has secured the permission of the Securities and Exchange Commission (SEC) to issue P15 billion in fixed-rate retail bonds.
The offer, composed of P10 billion of fixed-rate bonds and an oversubscription option of up to P5 billion, is the second tranche of the company’s P30-billion debt securities under shelf registration.
The company has also set the interest rates for the second tranche bonds—3.5915 percent for the three-year retail series I bond due 2025 and 4.7713 percent for the series J 5-year retail bond due 2027.
The bonds will be offered to investors through underwriters from February 7 to 11 band are set to be issued on February 18. The debt will be listed on the Philippine Dealing and Exchange Corp. for trading.
Net proceeds from the offer will be used primarily to refinance existing debts, the company said.
The company said it has P2.95 billion in loans from Mizuho Bank Ltd. that will mature in March, P2.55 billion in loans from The Hongkong and Shanghai Banking Corp. maturing in May and P2.5 billion in loans from BDO Unibank Inc. falling due also in May. The company will also have pay its Series D bondholders worth P7.68 billion which will mature in July.
The company engaged BDO Capital and Investment Corp. and China Bank Capital Corp. as joint issue managers for the offer, who will also work with BPI Capital Corp., East West Banking Corp., First Metro Investment Corp., RCBC Capital Corporation and SB Capital Investment Corp. as joint bookrunners and joint lead underwriters.
In November 2021, SMIC announced that its net income in January to September grew 79 percent to P27.2 billion, from the previous year’s P15.2 billion.
Consolidated revenues rose 5 percent to P289.4 billion during the nine-month period from last year’s P276.4 billion.
Banking accounted for 60 percent of SMIC’s reported net earnings from core businesses, followed by property at 27 percent and retail at 13 percent.
Retail net income was at P4.8 billion, growing more than double from P2.2 billion in 2021, on the back of the sustained growth in sales of the department store and specialty stores as well as cost management.
Retail revenues, however, slightly fell to P204.9 billion from last year’s P206.1 billion due to a higher base in 2020 from pantry loading of grocery items.