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Monday, May 5, 2014

SM Prime board approves P25B maiden retail bond sale

Photo be Bernard Testa

The board of SM Prime Holdings Inc has approved the property firm's maiden bond issuance to finance its expansion program.

In a disclosure to the Philippine Stock Exchange, the Henry Sy-owned company said its board of directors approved on Monday the offering of up to P25 billion in fixed-rate retail bonds.

The amount includes a P5-billion overallotment option in case of strong demand, SM Prime chief financial officer Jeffrey Lim said in an earlier interview.

The bonds will be sold with tenors of five years and six months, seven and/or 10 years.

Proceeds of the debt issuance will bankroll capital expenditures for its malls, offices and hotel operations. The real estate firm set a capex budget of P70 billion this year.

After the debt sale, SM Prime is looking at a syndicated loan of up to $300 million later this year to bankroll land banking initiatives and the development of its malls in China.

SM Prime is the holding firm for the mall, residential, office and leisure businesses of the Sy family following a corporate restructuring exercise approved by the Securities and Exchange Commission in October 2013.

With the consolidation of the Sy family's real estate assets, the enlarged SM Prime is now in a position to undertake larger scale projects with the participation of all of its business units.

SM Prime is spending P400 billion to expand its businesses that will double earnings within the next five years.

SM Prime’s earnings attributable to equity holders of the parent was flat at P16.27 billion in 2013 as one-time restructuring cost of P1.28 billion weighed on the company’s profit.
- Interaksyon

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