SM Prime returns to debt market with P17-B offer
Real estate giant SM Prime Holdings Inc. is set to launch another funding drive worth up to P17 billion, this time from local bonds.
Just days after raising $350 million from its inaugural dollar-denominated bond offer, the company announced on Monday that it had sought the Securities and Exchange Commission’s green light to sell fixed-rate bonds amounting to P12 billion.
If the activity gets more traction from investors, the group hopes to exercise an oversubscription option of up to P5 billion.
The offering, it noted in a disclosure, includes five-year Series AB Bonds due in 2030; seven-year Series AC Bonds due in 2032; and 10-year Series AD Bonds due in 2035.
This planned issuance is the third tranche of the property titan’s P100-billion shelf registration of fixed-rate bonds.
For this proposed new round of fundraising activity, local debt watchdog Philippine Rating Services Corp. (PhilRatings) has assigned the highest issue credit rating of “PRS Aaa” with a stable outlook.
A triple-A credit rating means that the company has “extremely strong capacity” to meet its financial commitments. A stable outlook, meanwhile, means that the firm will likely keep its credit score in the next 12 months.
Given its presence in the local market, with the development of malls, residences, offices, hotels and convention centers, PhilRatings said SM Prime remained “as a strong player in the Philippine property sector.”
Mall expansion
Outside the country, the developer has also expanded its footprint in China, with its ninth mall set for commercial operations by next month.
In the first six months, SM Prime saw its earnings reach P24.5 billion, 11 percent higher than a year ago, driven by higher rental income, real estate sales and ancillary revenues.
Its revenues likewise improved by 5 percent to P68 billion.
Malls accounted for 69 percent of SM Prime’s total earnings at P17 billion on new openings, higher foot traffic and strong occupancy.
Income from residential projects inched up by 2 percent to P5.1 billion. Earnings of the office and warehouse segment went up by 9 percent to P1.7 billion. Hotel and convention center earnings hit P635 million, up 20 percent.
