The initial issuance of the bonds is up to P15 billion. — SMINVESTMENTS.COM

SM INVESTMENTS CORP. (SMIC) is applying for a debt securities program with an aggregate amount of P30 billion with the Securities and Exchange Commission (SEC).

In a disclosure to the exchange on Wednesday, the Sy-led conglomerate said it had filed with the corporate regulator its registration statement for a P30-billion bond program under a shelf registration of three years.

It plans an initial issuance of the bonds of up to P15 billion, of which P5 billion will be the oversubscription option.

It said the initial tranche of the bonds had been rated PRS Aaa by local debt watcher Philippine Ratings Services Corp. (PhilRatings), which is the highest credit rating it gives to corporate bonds.

With this rating, the obligations are considered to be of the highest quality with minimal credit risk, and SMIC is deemed to have an “extremely strong” capacity to meet its financial commitment.

The company did not specify on Wednesday the purpose for the proceeds of the debt securities program.

During the first quarter, SMIC’s earnings fell 16% to P9 billion due to declines in its retail, property and banking segments with the imposition of a strict lockdown in mid-March. It is allocating P94 billion-P98 billion for capital expenditures this year.

As of end-March, the company’s net debt stood at P318.6 billion, with net debt-to-equity ratio at 49:51. It has bonds maturing in May 2021, July 2022, December 2023, May 2024 and June 2024.

The listed property arm of SMIC, SM Prime Holdings, Inc., said in June it was allocating P100 million to enhance its e-commerce channels as part of the so-called “new normal.” This will help the company adapt to limited mall operations due to the coronavirus disease 2019 outbreak.

Shares in SMIC at the stock exchange dropped P24 or 2.57% to P911 each on Wednesday. — Denise A. Valdez