SY-LED property developer SM Prime Holdings, Inc. has raised P17 billion from the issuance of fixed-rate retail bonds, which will finance the redevelopment and construction of its flagship malls.
The offering consists of P12 billion in fixed-rate retail bonds, with an oversubscription option of up to P5 billion, and was listed on the Philippine Dealing & Exchange Corp. (PDEx), the company said in a regulatory filing on Monday.
The issuance represents the third tranche of SM Prime’s P100-billion shelf registration of fixed-rate bonds, which was approved by the Securities and Exchange Commission (SEC) last year.
The bonds will carry interest rates of 5.9096% for Series AB maturing in 2030, 6.0858% for Series AC due in 2032, and 6.2855% for Series AD due in 2035.
Philippine Rating Services Corp. (PhilRatings) assigned the bonds its highest rating of PRS Aaa, with a “stable” outlook.
A PRS Aaa rating means that such obligations are of the highest quality with minimal credit risk, indicating that the company’s ability to meet its financial commitments is “extremely strong.”
“The success of this bond offering is a testament to the financial strength of SM Prime. The exercise also ensures the company has a balance sheet that can support its continued profitability and growth,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
SM Prime earlier said that proceeds from the issuance would be used to finance 16 major redevelopment projects and 12 new lifestyle malls scheduled through 2030, as well as the openings of its new malls in Xiamen and Fujian, China.
The developer’s latest bond issuance follows its $350-million debut issuance of a US dollar-denominated debt offering, after it deferred its planned $1-billion real estate investment trust listing until after 2026 amid market challenges.
SM Prime posted an 8% increase in third-quarter (Q3) net income to P12.8 billion, driven by contributions from its mall, hotel, and convention center businesses.
At the local bourse on Monday, SM Prime shares were up 7.63%, or P1.45, to close at P20.45 per share. — Beatriz Marie D. Cruz
