SAN MIGUEL CORP. (SMC) announced on Thursday its board’s approval of a P20-billion bond offering as part of the company’s fundraising efforts.

In a stock exchange disclosure, SMC said the approved fixed-rate peso-denominated bond offer will be issued from the remaining P50-billion shelf-registered bonds.

SMC’s board also approved the filing of the registration statement and offer supplement with the Securities and Exchange Commission (SEC) and the submission of the listing application with the Philippine Dealing & Exchange Corp.

Sought for comment, Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that the offer would be attractive to investors.

 “SMC has been very successful in tapping the debt capital markets to finance the conglomerate’s growth, and this new bond offering is very likely to be well received by investors looking for attractive yields,” he said.

AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said the offer would “lock” the conglomerate at high rates.

 “It’s already one of the most highly leveraged companies, so I’m not too keen on them adding more debt,” he said.

 “It’s also unfortunate that the issuance is fixed rate, which would lock SMC at high rates. It would have been better if the issuance had a floating rate component so the company can take advantage of future declines in interest rates,” he added.

In December, SMC raised P34 billion by selling 453.33-million preferred shares at P75 apiece. The conglomerate said that it would use the proceeds to repay short-term loans and previously issued bonds, as well as to invest in airport and airport-related projects.

The SEC previously approved SMC’s shelf registration of Series 2 preferred shares consisting of up to 866,666,700 shares to be offered within a three-year period.

In 2023, SMC saw a 67% jump in its net income to P44.7 billion carried by growth across its businesses.

 The conglomerate said its better financial performance came from its key businesses such as San Miguel Brewery, Inc., Ginebra San Miguel, Inc., Petron, and SMC Infrastructure, along with the integration of Eagle Cement Corp.’s financial results.

 SMC shares dropped by 0.2% or 20 centavos to P102 apiece on Thursday. — Revin Mikhael D. Ochave