SAN MIGUEL Corp. (SMC) looks to raise at least P10 billion from the issuance of fixed rate notes due 2020 to refinance existing debt and to manage dollar-denominated obligations.
In a preliminary prospectus posted on its website, the listed conglomerate said the issuance will consist of Series A fixed-rate notes due 2020 and Series B fixed-rate notes, with a noteholder put option, due 2020. SMC has placed an oversubscription option should there be higher demand for the notes.
Investors shall have the right to require SMC to redeem the Series B notes at face value after a year, as per its put option.
The Series A notes are slated to have a 5.25% per annum interest rate, while the Series B notes will have around 4.75% interest annually.
“The entire proceeds for this issue will be used either for: refinancing the existing loan obligations and/or re-denomination of US dollar denominated obligations of the company or investments in its subsidiaries in existing businesses of the company,” SMC said.
SMC has been refinancing its dollar-denominated debt to temper foreign exchange losses, given the weakening peso and rising interest rates.
The company tapped BDO Capital and Investment Corp. and BPI Capital Corp. as the offering’s joint lead underwriters and bookrunners.
SMC is offering the notes to qualified buyers who are judicial persons under Section 10.1 (1) of the Securities Regulation Code (SRC), which includes banks, registered investment houses, insurance companies, pension fund or retirement plan maintained by the Government of the Philippines, and investment companies.
Qualified buyers may also include “other persons as the commission may by rule determine as qualified buyers, on the basis of such factors as financial sophistication, net worth, knowledge, and experience in financial and business matters, or amount of assets under management.
The tentative date of the issue is on May 25, after which the notes will be listed at the Philippine Dealing and Exchange Corp.
The issuance will not require approval from the Securities and Exchange Commission as it does not meet the registration requirements outlined by the SRC.
SMC generated P54.7 billion in recurring profit last year, growing by 11% from the P49.4 billion delivered in the year before. Consolidated revenues increased by 21% to P826 billion fueled by improving sales across all liquor, food and beverage, fuel, and power businesses.
Shares in SMC closed flat at P136 each at the stock exchange on Wednesday. — Arra B. Francia
