SM Prime says retail bond offering generates P25B

SM Prime says retail bond offering generates P25B

SM Prime says retail bond offering generates P25B

By Revin Mikhael D. Ochave, Reporter

SY-LED property developer SM Prime Holdings, Inc. on Tuesday said it successfully raised P25 billion through its fixed-rate retail bond offering.

The company listed the bonds on the Philippine Dealing and Exchange Corp. on June 24, SM Prime said in a statement to the stock exchange.

The funds generated will be used to refinance existing debt obligations and to further expand SM Prime’s property portfolio, the company said.

“The successful listing of SM Prime’s fixed rate retail bond Series V, W, and X have been met with overwhelming demand from the investing public, resulting in a three-fold oversubscription that has allowed us to raise an impressive P25 billion,” SM Prime Chief Finance Officer John Nai Peng C. Ong said.

“This remarkable success is a testament to the unwavering trust and confidence that our shareholders, customers, business partners, and the investing community have placed in SM Prime,” he added.

The interest rates for the peso-denominated bonds are set at 6.5754% for Series V maturing in 2027, 6.7537% for Series W maturing in 2029, and 6.9650% for Series X maturing in 2031.

This bond issuance marks the first tranche of SM Prime’s P100 billion shelf registration of fixed-rate bonds, which was approved by the Securities and Exchange Commission (SEC) on May 23.

Sought for comment, Jose Antonio B. Cipres, a research analyst at AP Securities, Inc., said: “The oversubscription implies that investors are already highly satisfied with the yield offered, providing clearer signals for the interest rate outlook moving forward.”

“(We expect the same result), especially if the top property developers will be the one issuing bonds with almost the same yield,” he said in a Viber message.

April Lynn Lee-Tan, chief equity strategist at COL Financial Group, Inc., said that confidence in the property sector remains “a case-by-case basis.”

“SM Prime has good cash flow so it’s not surprising that demand is good,” she said in a Viber message.

The property developer tapped BDO Capital & Investment Corp. and China Bank Capital Corp. as joint issue managers, who are also acting as joint lead underwriters along with BPI Capital Corp., East West Banking Corp., First Metro Investment Corp., Land Bank of the Philippines, Security Bank Corp., and SB Capital Investment Corp.

SM Prime and SM Investments Corp. previously announced its maiden $3-billion multi-issuer European Medium Term Note (EMTN) program. It aims to finance expansion and debt payments. EMTNs are a debt security that are issued and traded overseas.

For the first quarter, SM Prime recorded an 11% increase in its net income to P10.5 billion as consolidated revenue increased by 7% to P30.7 billion led by stronger mall and residential businesses.

SM Prime shares rose by 0.56% or 15 centavos to P27.15 per share on Tuesday.

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