SMIC raises P5.6 B from notes issue

Published July 22, 2020, 10:00 PM

by James A. Loyola

SM Investments Corporation (SMIC) has raised P5.6 billion from the issuance of Fixed Rate Notes Due 2022 specifically targeted for Qualified Institutional Buyers.

 In a disclosure to the Philippine Stock Exchange, SMIC said it has enrolled the Notes) with the Philippine Dealing and Exchange Corporation.

The 18-month Notes were priced at a yield of 2.875 percent per annum and matures on January 22, 2022. BDO Capital and China Bank Capital were tapped as joint lead arrangers.

SMIC, the holding company of the SM Group of Companies, recently secured the approval of the Securities and Exchange Commission for a P30 billion debt securities program.

 The P30 billion bonds were approved under a shelf registration of three years.

SMIC was assigned the highest issue credit rating of PRS Aaa for the initial tranche of P10.0 billion, with an oversubscription option of up to P5.0 billion, by the Philippine Rating Services Corporation (PhilRatings).

The rating for SMIC’s outstanding P42.7 Billion bonds was likewise maintained at PRS Aaa. PhilRatings assigned a Stable outlook for the ratings of the proposed and outstanding bonds.  

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. PRS Aaa is the highest rating assigned by PhilRatings.

A Stable outlook, on the other hand, indicates that the ratings are likely to be maintained or to remain unchanged in the next twelve (12) months.

“The ratings reflect SMIC’s core businesses with strong market positions; its sound balance sheet, with healthy liquidity and conservative capital structure; and the strategies that the SM Group has put in place to immediately address pressure on earnings due to the ongoing community quarantine and COVID-19 pandemic,” PhilRatings said.

“Online and delivery initiatives of the SM Group are being expanded to address new customer needs and behavior brought about by the quarantine and pandemic. With the re-opening of malls being done in phases, expectations are for a slow return of foot traffic to pre-lockdown levels,” PhilRatings said.