SM PRIME Holdings, Inc. said on Monday it filed an application with the Securities and Exchange Commission (SEC) for a permit to sell up to P20 billion in fixed-rate retail bonds.
In a statement, SM Prime said the company is planning to issue P15 billion in fixed-rate bonds, with an oversubscription option of up to P5 billion with maturities of five and seven years.
Philippine Ratings Services Corp. (PhilRatings), in a separate statement, said it gave SM Prime’s proposed bond issue its highest credit rating of PRS Aaa.
A PRS Aaa rating indicates that the obligor’s capacity to meet its financial commitment is “extremely strong.” The bonds were also given a stable outlook, which means that the rating is likely to remain unchanged in the next 12 months.
The issuance forms part of the third tranche of SM Prime’s proposed three-year Debt Securities Program of up to P60 billion.
SM Prime’s financial profile, brand equity, operational track record, and expansion program were some of the factors that PhilRatings took into account in coming up with the credit rating.
“(SM Prime) is one of the biggest integrated property developers in the Philippines, and also one of the largest in Southeast Asia based on market capitalization. Over the years, the company has grown into one of the most diversified real estate companies in the country with business interests in malls, residential, commercial, as well as hotels and convention centers,” PhilRatings said.
The holding firm of country’s richest man Henry Sy, Sr.’s property investments ended 2017 with a total of 67 malls in the Philippines and seven in China, covering a gross floor area of 9.3 million square meters.
The company has lined up the opening of more shopping malls in the countryside, specifically SM Center Imus, SM City Legazpi, SM City Urdaneta, SM City Telabastagan, SM City Ormoc, SM City Dagupan, SM Moonwalk Parañaque, and SM Center Cabuyao in the coming years.
“Over the projected period, profitability will remain strong. Revenues will continue to be buoyed by rental fees coming from shopping mall operations, as SM Prime continues to expand, construct, and open more SM malls,” according to PhilRatings.
SM Prime is currently on the last year of a five-year road map that aims to double earnings and revenues back in 2013, recorded at P16.3 billion and P59.8 billion, respectively.
For the first nine months of 2017, the company recorded a net income attributable to the parent of P20 billion, following revenues of P64.7 billion during the same period.
Shares in SM Prime were up 45 centavos or 1.16% to close at P39.35 each at the stock exchange on Monday. — Arra B. Francia
