Business

SMC finishes P30-B plate float

Conglomerate San Miguel Corp. (SMC) has implemented a new domestic bond offering of P30 billion, setting a new record as the largest bond deal chopped by a non-banking institution out of the local debt market.

SMC, which has been an active issuer of corporate bonds for the past 12 years, returned to the local debt market for the first time since the pandemic erupted chaos in the global economy. Proceeds from the issue will be used to write off existing liabilities in dollars, allowing the company to limit currency risks.

The six-year SMC bonds maturing in 2027, which have an interest rate of 3.3832 percent per annum, were listed on the local fixed-rate trading platform Philippine Dealing & Exchange Corp. (PDEx) Thursday.

“Despite the challenging economic environment, SMC has once again successfully exploited the bond market for its financing needs from our last listing in 2019. [for a P10-billion bond issuance], ”Said CFO of SMC, Ferdinand Constantino, during the listing ceremony in PDEx.

The latest bond issue of P30 billion has a put option or potential pricing on the third year and optional redemption on the fourth or fifth year.

‘Jumbo’ bond issue

PDEx President Antonino Nakpil welcomed SMC’s “jumbo” issue, which he cited as a long-standing and frequent issuer of corporate bonds at PDEx.

With this listing, SMC now has a total of P90 billion. Bonds listed on PDEx and account for 6.36 percent of the total outstanding corporate bonds in this platform, Nakpil said.

Including bonds issued by SMC subsidiaries, the group’s total listings on PDEx now amounted to P244.47 billion or 17.21 percent of the total listed issues, Nakpil said.

He also cited the breadth of investors attracted by the recent issue, which reserved 6,097 bondholders. This level of participation was only exceeded by SMC’s own subsidiary, SMC Global Power, whose previous bond issue brought in as many as 6,836 investors, Nakpil noted.

He recalled that the SMC group first tapped the local debt market via PDEx in 2009 with the first issuance of the flagship San Miguel Brewery.

After subdued activity in the first half of 2021, Nakpil said the SMC’s issuance was a “good kickstart to the second half when we expect the economies of the economy to start demanding funds as the country moves further towards the hoped-for national recovery.”

There is now P1.42 trillion worth of corporate debt instruments listed on PDEx. This year alone, Oslo Børs experienced new bonds of P134.24 billion. SMCs were the 11th bond listing so far this year.

SMC’s latest issue marked the first tranche of its P50 billion bond registration record.

—Doris Dumlao-Abadilla

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