SM Prime Holdings Inc. (SM Prime), one of Southeast Asia’s largest property developers, has successfully raised ₱25 billion from the issuance of fixed-rate retail bonds, which it listed on the Philippine Dealing & Exchange Corporation (PDEx) on Feb. 25, 2025.
The issuance, consisting of Series Y, Z, and AA bonds due in 2028, 2031, and 2035, respectively, marks the second tranche of SM Prime’s ₱100 billion shelf registration of fixed-rate bonds approved by the Securities and Exchange Commission (SEC).
The bonds were offered from Feb. 12 to 18, 2025, and the rate for the Series Y bonds due in 2028 has been set at 6.0282 percent; Series Z due in 2031 at 6.2113 percent; and Series AA due in 2035 at 6.4784 percent.
SM Prime said it issued an aggregate principal amount of ₱20 billion, with an oversubscription option of up to ₱5 billion.
The first tranche of ₱25 billion of the ₱100 billion registered bonds was listed at PDEx on June 24, 2024. This consisted of Series V, W, and X, due in 2027, 2029, and 2031, respectively.
Similar to its previous bond issues, the Series Y, Z, and AA have been rated PRS Aaa by Philippine Rating Services Corporation (PhilRatings).
PRS Aaa rating is the highest rating assigned by PhilRatings, denoting that such obligations are of the highest quality with minimal credit risk and that the issuing company‘s capacity to meet its financial commitment to the obligations is extremely strong.
PhilRatings said the rating for SM Prime’s outstanding bonds amounting to ₱137.8 billion was likewise maintained at PRS Aaa. PhilRatings assigned a stable outlook for the ratings of the proposed and outstanding bonds.
SM Prime is allotting ₱100 billion for capital expenditures this year, the same as the amount earmarked in 2024, as it expects sustained growth in consumer demand and corporate activity.
“We expect election-related spending, easing interest rates, and higher tourism spending to fuel our growth in 2025,” said SM Prime President Jeffrey C. Lim, highlighting the company’s strong outlook.
He noted that, “Our growth will be driven by the mall business, while our robust project pipeline will enhance the expansion of strategic initiatives across our diversified portfolio.”
Lim said SM Prime’s investment this year will be prioritized for malls, residences, and integrated property developments (IPDs).
The bulk of capex, amounting to ₱67 billion in investments, is planned for SM Residences and IPDs.
The residential projects will include regional, premium and leisure developments, while the IPDs—large, mixed-use, master-planned urban centers—will primarily be in Luzon and the Visayas.
SM Prime has also set aside approximately ₱21 billion to expand its malls’ gross floor area (GFA) to over eight million square meters (sqm) by the end of the year.
New developments will add 205,400 sqm of GFA, while 124,488 sqm of existing mall space will undergo redevelopment.
Meanwhile, SM Prime is set to invest ₱12 billion in its office, hospitality, and MICE (meetings, incentives, conferences, and exhibitions) businesses to expand capacity and enhance facilities.
The investment will fund the construction of two new convention facilities, the renovation of hotel rooms, and the addition of food and beverage facilities in existing hotels.
The company will also develop new office towers and workspaces, including Six E-Com Center, a Grade A office tower in the Mall of Asia (MOA) complex designed for technology-driven industries and business process outsourcing (BPO) firms. The expansion is a result of robust tenant demand for existing inventory.
“These planned investments position us to meet evolving customer needs while driving SM Prime toward its next phase of growth,” said Lim.