The Sy family-controlled SM Prime Holdings, Inc., one of the leading integrated property developers in Southeast Asia, is planning to raise up to P25 billion from the first tranche of its P100 billion bonds to be shelf-registered with the Securities and Exchange Commission.
In a disclosure to the Philippine Stock Exchange, SM Prime said it has submitted to the SEC a Registration Statement in relation to its application for the Shelf Registration of Debt Securities amounting to P100 billion.
The Company’s proposed initial bond offering is up to P20 billion, with an over subscription option of up to P5 billion consisting of 3-year Series V Bonds due in 2027, 5-year Series W Bonds due in 2029, and 7-year Series X Bonds due in 2031.
Philippine Rating Services Corporation (PhilRatings) said it has assigned the highest issue credit rating of PRS Aaa to SM Prime’s proposed bond issue of P20.0 billion, with an oversubscription option of up to P5.0 billion.
PhilRatings also maintained an issue rating of PRS Aaa for SM Prime’s outstanding bonds amounting to P135.43 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, on the other hand, indicates that the rating is likely to be maintained or to remain unchanged in the next 12 months.
PhilRatings said the assigned issue ratings take into consideration SMPH’s strong liquidity; sustained recovery in profitability; sound capitalization; well-experienced shareholders and management; and solid brand equity.
SM Prime sustained its profitability in 2023, steadily recovering from the slowdown in its 2020 performance due to the pandemic.
Consolidated revenues in 2023 amounted to P128.1 billion, exceeding 2019 pre-pandemic revenues by 8.3 percent and higher by 21.1 percent from P105.8 billion in 2022. The Company ended the year with a net income of P40.9 billion, higher by 32.9 percent from 2022 and exceeding 2019 pre-pandemic net income by 5.3 percent.
“Profitability is seen to sustain a healthy uptrend. Rent income growth will be supported by same-store rent plus the addition of new malls, offices, hotels and other expansion.
“The launches of new high-rise and mid-rise projects and sales of ready-for-occupancy (RFO) units are projected to drive higher revenues from real estate. Other revenue streams are also seen to gradually increase in the next terms,” PhilRatings said.
It added that, “While costs and expenses are expected to go up with in line with the expansion in revenues, margins are expected to remain strong as SM Prime continues to optimize operations.”