SM Prime Holdings Inc. is going back to the retail-bond market and has informed regulators of a renewed intent to sell debt worth at least P15 billion.
In seeking permission from the Securities and Exchange Commission (SEC), the property-development arm of the Sy family reminded the SEC that the exercise formed part of a shelf registration bid to sell an aggregate P60 billion.
SM Prime CFO John Nai Peng C. Ong said the exercise has a built-in provision allowing the property developer to upsize the sale as high as P20 billion, depending on market appetite.
Ong told the SEC that they plan on selling five- and seven-year fixed-rate bonds based on the authority the regulator gave the developer in July 2016.
So-called corporate bonds form a miniscule part of aggregate debt financing by the various privately owned businesses in the Philippines equal in dollar terms to only $20 billion in 2017, according to estimates by First Metro Investment Corp. (FMIC).
Bank loans remain the primary source of financing corporate activities in the country, totaling the equivalent of $118 billion last year, FMIC said.
SM Prime’s debt sale comes at a time when banks and financial institutions are awash in liquidity but have few investment vehicles to latch on to and make their money work for them.
It also comes at a time when the United States Federal Reserve System, steward at the world’s largest financial market, is seen to make appropriate adjustments on key interest rates that have central banks and investors alike on high alert for the latest word.