SM Investments Corp., the holding family of tycoon Henry Sy, said Wednesday it plans to issue up to P20 billion worth of fixed-rate bonds before the end of the year.
SMIC said in a disclosure to the stock exchange its board of directors approved a fixed-rate bond program with a principal amount of P50 billion under the three-year shelf registration facility of the Securities and Exchange Commission.
“Initial issuance under this program is expected later this year in the amount of P15 billion with an over subscription option of up to P5 billion,” the conglomerate said.
Its board of directors also authorized SMIC management to negotiate and finalize the terms and conditions, including pricing, tenor and any increase in issuance amount.
SMIC chief finance officer Jose Sio early this month said the conglomerate was filing for a P50-billion shelf-registration to raise funds for “investment purposes,” particularly to support the capitalization of subsidiaries and finance the expansion of non-core businesses.
Sio said the conglomerate planned to issue bonds with tenor of seven and 10 years.
SMIC is one of the country’s largest publicly listed companies with core investments in banking, and property development
Outside these core businesses, the group also has investments in retail, mining and tourism-oriented developments.
Property and shopping mall unit SM Prime Holdings Inc. also filed for P60-billion shelf registration program with SEC in May to finance expansion programs.
It initially issued P10 billion worth of 10-year bonds in July amid strong demand from investors.
A number of listed companies also availed of the shelf-registration program of SEC to fund their expansion plans.
Under a shelf registration program, securities to be issued in tranches may be registered for an offering to be made on a continuous or delayed basis for a period not exceeding three years.
This means the issuers can time their capital raising activities as they are needed and/or when market conditions favor them.
SEC also provided flexibility in the payment of registration fees. The fees are now payable per tranche of issuance and proportional to the issued value.