SM Prime to raise up to P35 B from bond issuance

SM Prime Holdings Inc. is planning to raise up to P35 billion from a planned issuance of bonds representing the fifth and final tranche of its Three-year Shelf Registration Debt Securities Program of up to P100 billion.
Philippine Rating Services Corporation (PhilRatings) said in a statement that it has assigned its highest issue credit rating of PRS Aaa to SM Prime’s proposed bond issue.
PhilRatings also maintained an issue rating of PRS Aaa for SM Prime’s outstanding bond issuances amounting to P109.63 billion. A Stable Outlook has also been assigned for the ratings of the proposed and outstanding bonds.
Obligations rated PRS Aaa are of the highest quality with minimal credit risk and the obligor’s capacity to meet its financial commitment on the obligation is extremely strong. A Stable Outlook indicates that the rating is likely to remain unchanged in the next 12 months.
“The assigned issue ratings take into consideration SMPH’s healthy liquidity; sound capitalization; well-experienced shareholders and management; and its solid brand equity which is supportive of steady recovery amidst economic headwinds, PhilRatings said.
In 2022, SMPH recorded pronounced growth in mall operations, supported by the easing of mobility restrictions, re-opening of physical stores and greater foot traffic in malls.
Total revenues and net income of the Company expanded by 28.5 percent and 40.3 percent, to P105.8 billion and P30.7 billion, respectively, in 2022.
Resulting operating cashflows were healthy, coming from improved earnings for the year. Strong cash flows from operations were sustained and continued to fund bulk of the Company’s working capital requirements.
In addition to internally-generated cash, SMPH also availed of borrowings to fund capital expenditure requirements. Despite additional debt, however, leverage levels were managed conservatively.
At present, headwinds from global conflict and domestic price inflation, among others, pose risks to continued recovery. Nevertheless, SMPH is seen to be in a solid position to sustain its growth.
The Company’s ties with the SM Group, its strong brand identity, expansive network and good synergy with other businesses of the SM Group, are expected to be supportive of SMPH’s growth and expansion moving forward.