SM Prime Holdings Inc. is finally opening its bond sale to investors this week through a number of select issue managers, bookrunners and lead underwriters.
The integrated property developer said the bond sale will begin on February 12 to 18, with Feb. 25, 2025 set as the issue date.
Foreign investors are welcome to invest as long as they have an existing account with the issue participants, an SM Prime source said, stressing that is the case “as long as the foreigner has an account with any of the joint lead underwriters and selling agents of the local bonds.” The source asked not to be named.
The IOU is part of the company’s P100 billion shelf-registered debt securities program approved by the Securities and Exchange Commission in June last year.
SM Prime plans to spend P33 billion this year to expand the gross floor area of its shopping malls, build a convention center, and renovate rooms and add food and beverage lounges in its existing hotels.
The company has priced its P25 billion bond sale at a coupon rate of 6.0282 percent for the three-years series falling due in 2028; 6.2113 percent for the six-year series due in 2031; and 6.4784 percent for the 10-year series due in 2035.
The rates carry a premium over the comparative tenors of 5.8343 percent for the three-year series and 6.1178 percent for the 10-year bonds traded at the Philippine Dealing and Exchange Corp. (PDEx)
The PDEx does not have a benchmark rate for six-year bonds except for the five-year series at 5.9184 percent, and the seven-year series at 5.9968 percent.
SM Prime’s Series Y, Z, and AA Bonds will be made available to investors through joint issue managers BDO Capital & Investment Corp. and China Bank Capital Corp., which are also joint bookrunners and joint lead underwriters together with BPI Capital Corp., First Metro Investment Corp., Landbank of the Philippines, PNB Capital and Security Bank Capital.
The bond sale is set at P20 billion with a P5 billion oversubscription cover.
“Similar to its previous bond issues, the Series Y, Z and AA have been rated PRS Aaa by Philippine Rating Services Corporation (PhilRatings). PRS Aaa rating is the highest rating assigned by PhilRatings, denoting that such obligations are of the highest quality with minimal credit risk and the issuing company’s capacity to meet its financial commitment on the obligations is extremely strong,” SM Prime told regulators.
Jeffrey Lim, SM Prime president, said the company targets to spend P21 billion for expanding its malls’ gross floor area (GFA).
“New developments will add 205,400 square meters of GFA, while 124,488 square meters (sqm) of existing mall space will undergo redevelopment,” he said.
The goal is to close 2025 with a gross floor area of 8.08 million sqm.
At the same time, SM Prime is investing around P6 billion in its tourism-related businesses.
Its office space business will also spend P6 billion to develop new office towers and workspaces, which includes Six E-Com Center within the Mall of Asia Complex. Six E-Com Center will cater to technology-driven industries and business process outsourcing (BPO) firms.
Lim believes the country’s economy will grow within the government’s 6 to 7 percent target this year, driven by moderating inflation, easing interest rates and election-related spending.
