SM Prime gets green light for ₱100-B bond offering

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Real estate giant SM Prime gets the green light to offer bonds worth ₱100 billion in the next three years to fund new malls and upgrade existing developments.

Metro Manila (CNN Philippines, February 12) — The Securities and Exchange Commission has approved SM Prime Holdings' plan to secure debt worth ₱100 billion through an offer of its bonds over the next three years to raise funding to upgrade or build new malls.

In a statement, the corporate regulator said it has given the green light for the listed developer to issue debt papers under shelf registration, allowing the company to split the bond float into several tranches.

The SEC en banc said it has also issued the permit to sell the securities for an initial set of bonds worth ₱15 billion, with an option to add another ₱5 billion. The bonds, which must be repaid in five or seven years, will be issued in minimum denominations of ₱20,000 plus multiples of ₱10,000. These notes will be listed on the Philippine Dealing & Exchange Corporation.

The regulator said SM Prime will use the additional investments to fund the construction of new malls as well as expansion projects.

Luis Limlingan, managing director of Regina Capital Development Corporation, said the size of the bond float is "expected," given the conglomerate's size. He pointed out that interest rates have also been falling, making it a good time to tap the markets for funding.

In December, SM Prime bagged the contract for a 360-hectare reclamation and construction project in Pasay City that will host a new business district, which will be connected to the firm's Mall of Asia Complex.

BDO Capital & Investment Corporation, China Bank Capital Corporation, BPI Capital Corporation, East West Banking Corporation, First Metro Investment Corporation, RCBC Capital Corporation and SB Capital Investment Corporation have been tapped as joint lead underwriters for the offer.

Shares at SM Prime dipped by 0.94 percent to end at ₱42.30 apiece on Wednesday.

The company recently named Steven Tan, its long-time chief financial officer, as president of SM Supermalls and Jose Mari Banzon as president of SM Development Corporation or SMDC, its residential property arm.