May 29, 2017 | MANILA, PHILIPPINES

SM Prime lists P20-B fixed-rate bonds

SM PRIME Holdings, Inc. returned to the fixed-income market for the first time this year, with the listing P20 billion worth of bonds on the Philippine Dealing and Exchange Corp.


“We celebrate this resurgence by now seasoned issuers such as SM Prime showing the way for other corporate issuers to tap the resources of the market,” Philippine Dealing System Holdings (PDS) group President and Chief Executive Officer Cesar B. Crisol said during the listing ceremony.

The P20-billion fixed-rate bonds consist of Series G Bonds maturing in seven years with an interest rate of 5.1683%. The Philippine Ratings Services Corp. gave the issue a rating of Prs AAA, which indicates a positive outlook and that the obligor’s capacity to meet its financial commitment is strong.

The bond issue of the property holding firm of country’s richest man Henry Sy, Sr. brings the total volume of listings at the PDEx to P93.04 billion. Total outstanding listed securities volume stood at P699.7 billion from the issuance of 120 securities of 43 companies.

This is SM Prime’s fourth listing on the bond market, with the last one in July. The issue is also the hundredth listing since the start of the corporate bond board on the organized market in 2008.

Proceeds of the issue will be used to fund the company’s capital expenditure of P5 billion per annum over the next two years. Of this, 80% will be used for residential projects, the construction of malls, and landbanking.

“We expect SM Prime’s growth to continue over the years,” SM Prime Chief Finance Officer John C. Ong said for his part during the listing ceremony.

SM Prime is slated to finish the construction of five new malls outside of Metro Manila this year, ending 2017 with a footprint of 65 malls in the country.

The firm is also setting its sights on the Southeast Asian market, with SM Prime President Jeffrey C. Lim saying that they are currently conducting studies on which markets it can enter.

“I don’t think we’ll go to all countries in the ASEAN, maybe two or three countries just to study and then we decide. Hopefully within the year we’ll get to assess,” Mr. Lim said.

Mr. Lim added that they have sent people to Thailand, Vietnam and Indonesia, and could be sending people to Myanmar and Cambodia to test the market as well.

“It depends on the market, if there is demand.”

SM Prime’s earnings grew by 13% to P6.6 billion in the first quarter of 2017, as the company’s shopping mall business continues to grow.

Shares in SM Prime closed 30 centavos or 0.91% lower to P32.50 each on Thursday. -- Arra B. Francia