SM Prime Holdings Inc. has set the final terms for its planned P20-billion, fixed-rate retail bond offering slated this month.
SM Prime in an amended prospectus filed with the Securities and Exchange Commission pegged the final rate for the five-year bonds due 2021 at 4.5095 percent a year and the 10-year bonds due 2024 at 4.7990 percent per annum.
SM Prime plans to issue P15 billion worth of bonds with an oversubscription option of up to P5 billion to cover over-allotment.
The company said it would place the unused portion under shelf registration for issuance within a one-year period as prescribed under the SEC rules, if the oversubscription was not fully exercised,
It scheduled the offering period from Nov. 4 to Nov 13 and the issue date on Nov. 25.
SM Prime plans to use proceeds from the bond offering to finance the construction of new shopping malls across the country.
The company said capital expenditures in 2016 would reach P65 billion, higher than the P64-billion programmed spending for this year.
SM Prime would earmark about 52 percent of the 2016 capital spending for shoppings malls, 38 percent for residential, 7 percent for commercial and 3 percent for hotels and convention centers.
“SM Prime plans to fund its capital expenditure through recurring income flows and external financing,” the property developer said earlier.
The company said its mall expansion plans were geared toward major cities outside Metro Manila. It said per capita income and rent per square meter in several cities were already comparable with Metro Manila, as business process outsourcing companies expanded to the provinces.
The group said it still planned to expand in Metro Manila, by developing supercenters, or malls consisting of less than 100,000 square meters of leasable space.
SM Prime plans to open four to five malls each year over the near term period to achieve its target of 100 malls in the Philippines by 2020.
SM Prime in 2016 will open six new malls in the Philippines—Trece Martires in Cavite province, Commonwealth in Quezon City, San Jose Del Monte in Bulacan, Tuguegarao in Cagayan, Puerto Princesa in Palawan and Urdaneta in Pangasinan and one Tianjin, China.
It also plans to build one mall per year in China, especially in second and third tier cities, over the near term period, subject to market conditions.
SM Prime hired BDO Capital Corp., China Banking Corp., First Metro Investments Corp. and BPI Capital Corp. as joint lead underwriters for the offering
Aside from mall expansion, SM Prime plans to expand its office portfolio in key cities in Cebu, Davao and Iloilo, where business process outsourcing companies are currently expanding their operations on favorable labor market.
SM Prime through SM Development plans to launch 12,000 to 15,000 residential units annually over the next few years targeting the mass middle market.
SM Prime in the first nine months of the year booked a net income of P22.9 billion, up 70 percent from from a year ago, with profit boosted by a one-time trading gain of P7.4 billion on marketable securities recorded in the first quarter of the year.
Net income on a recurring basis increased 15 percent to P15.5 billion from a year ago.