By James A. Loyola
SMC Global Power Holdings Corporation, the power generation unit of diversified conglomerate San Miguel Corporation, is raising up to P30 billion from the issuance of bonds.
Philippine Rating Services Corporation (PhilRatings) said SMC Global Power’s proposed bond issuance amounts to P25 billion, with an oversubscription of up to P5 billion.
This represents the first tranche of the company’s 3-year shelf registration of bonds worth up to P60 billion.
Based on the offer prospectus, the entire proceeds will be used for partial refinancing of existing loan obligations and re-denomination of US Dollar denominated obligations of the company.
Proceeds will also be used for SMC Global Power’s investments in power-related assets and for the payment of transaction-related fees, costs and expenses.
The said loan obligations and US-dollar denominated obligations were used mainly to finance three acquisitions, including the acquisition of 100 percent interest of AES Phil Investment Pte., Ltd (AES Phil) in AES Transpower Private Ltd. and in AES Philippines, Inc.
The loans were also used to acquire 100 percent equity interests of AES Phil and Gen Plus B.V. in Masin-AES Pte. Ltd., the indirect parent company of Masinloc Power Partners Co. Ltd.
PhilRatings has assigned the highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, to SMC Global Power’s proposed P30 billion bond issuance as well as the firm’s outstanding rated bonds amounting to P50 billion.
In arriving at the rating, PhilRatings considered SMC Global Power’s leading market position with a solid platform for expansion; strong support from the parent firm SMC; and the stability of earnings and substantial cash flows, supported by the long-term off-take contracts of the company.
It also factored in the firm’s ideal position to capitalize on the growing demand for electricity in the country, supported by the expansion of the domestic economy.