SM Prime Holdings Inc. (SMPH) plans to issue up to P25 billion in fixed-rate retail bonds, representing the second tranche of a P100-billion shelf registration approved by the Securities and Exchange Commission (SEC) in June.
In a stock exchange filing on Thursday, SMPH said that it had submitted to the SEC an application for a permit to sell fixed-rate bonds amounting to up to P20 billion, with an oversubscription option of up to P5 billion, consisting of three-year Series Y bonds due 2028, six-year Series Z bonds due 2031, and 10-year Series AA bonds due 2035.
The proposed bond offer has been assigned a PRS Aaa credit rating with a “stable” outlook by the Philippine Rating Services Corp. (PhilRatings).
Proceeds of the proposed bond issuance will go toward debt refinancing and capital expenditures.
The rating agency said that it maintained an issue rating of PRS Aaa for SMPH’s P137.83-billion in outstanding bonds, with a “stable” outlook.
“The assigned issue ratings take into consideration SMPH’s sustained recovery in profitability; strong liquidity; sound capitalization; well-experienced shareholders and seasoned management; and solid brand equity,” it said.
The first tranche of the P100-billion shelf registration was issued last June, raising P25 billion for SMPH.
The June 2024 bond offer consisted of the three-year Series V, five-year Series W and seven-year Series X due 2027, 2029 and 2031, with interest rates of 6.5754 percent, 6.7537 percent, and 6.965 percent per annum, respectively.
Proceeds of the first tranche were used to refinance debt and expand the company’s property portfolio, enabling SMPH to further strengthen its market position and fund several ongoing projects.
These projects include mall expansions, with plans to open at least three malls next year. With a land bank of approximately 2,374 hectares, SMPH seeks to position itself for continued development over the next five to seven years.
SMPH reported a 12.3-percent rise in net income for the first nine months of 2024 to P34.6 billion on the back of a steady increase in rent and real estate sales, with revenues in the period surging to P99.8 billion from P92.6 billion in the same period last year.
The company has said that it was eyeing P100 billion to P110 billion in capital expenditures next year to fund the opening or refurbishing of malls across the country.
SMPH shares on Thursday shed 20 centavos, or 0.80 percent, to close at P24.90 apiece amid a 1.14-percent drop for the benchmark Philippine Stock Exchange index.
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