SM Prime files with SEC for P17-B fixed-rate bond issuance

SM PRIME HOLDINGS, INC. (SMPH) is hoping to raise up to P17 billion from a peso-denominated fixed-rate bond issuance, following its $350-million debut offering of US dollar-denominated senior notes.

In a stock exchange disclosure on Monday, the listed property developer said it filed an application with the Securities and Exchange Commission (SEC) to issue P12 billion in fixed-rate bonds, with an oversubscription option of up to P5 billion.

The proposed issue represents the third tranche of SM Prime’s P100-billion debt securities program cleared by the SEC in June 2024.

Philippine Rating Services Corp. (PhilRatings) assigned the bonds the highest rating of PRS Aaa with a “stable” outlook, indicating “extremely strong” capacity to meet financial commitments.

PhilRatings also affirmed the PRS Aaa rating of SM Prime’s P141.5-billion outstanding bonds.

The offer will consist of five-year Series AB bonds due in 2030, seven-year Series AC bonds due in 2032, and 10-year Series AD bonds due in 2035.

SM Prime said proceeds will help fund its 16 major redevelopments and 12 new lifestyle malls scheduled until 2030, as well as the opening of new malls in Xiamen and Fujian, China.

“After the strong demand for its oversubscribed dollar-denominated issuance, SMPH’s planned P17-billion offering is also expected to attract solid investor interest,” First Metro Securities Brokerage Corp. Equity Research Analyst Nicole Aquino said in a Viber message.

“While indicative rates have yet to be disclosed, pricing is expected to be close to the previous 6% to 6.4%, offering an attractive spread over the PH 10-year bond yield,” she added.

Last week, the company raised $350 million from its first dollar bond issuance, while shelving its planned $1-billion real estate investment trust listing to beyond 2026 due to unfavorable market conditions.

SM Prime reported an 11% rise in its first-half net income to P24.5 billion.

Shares in SM Prime slipped 0.21% or five centavos to P23.85 apiece on Monday. — Beatriz Marie D. Cruz