SMC sets rate for P15B bond offering
MANILA, Philippines – San Miguel Corporation (SMC) is set to return to the bond market starting Tuesday, March 21, to raise P15 billion largely to settle its $300-million loan with a Japanese bank, which will mature in November.
The planned 5-year bond offering worth P15 billion has moved forward, as the company sets an interest rate of 5.1923% per year.
San Miguel told the Philippine Stock Exchange (PSE) that the offer period for the bond offering will be from March 21 to March 27.
The bonds will be listed with the Philippine Dealing & Exchange Corporation on April 7.
San Miguel said it is issuing P10 billion worth of fixed rate bonds with an oversubscription of up to P5 billion.
The bonds represent the 2nd tranche of bond offering under its P60-billion shelf registration earlier approved by the Securities and Exchange Commission.
Proceeds will be used to settle the conglomerate's $300-million loan with the Bank of Tokyo-Mitsubishi UFJ Limited, maturing this November.
San Miguel has tapped BDO Capital & Investment Corporation, BPI Capital Corporation, ING Bank, RCBC Capital Corporation, SB Capital Investment Corporation, and Standard Chartered Bank.
It was only last February when San Miguel raised P20 billion to fund dollar-denominated debts.
It raised P6.9 billion for the 5-year Series A Bonds due 2022 with an interest rate of 4.8243% per year; P7.3 billion for the 7-year Series B Bonds due 2024 with an interest rate of 5.2840% per year; and P6 billion for the 10-year Series C Bonds due 2027 with a fixed interest rate of 5.7613% per year.
This latest bond offering was assigned an issue credit rating of PRS Aaa, with a stable outlook, by Philippine Rating Services Corporation (PhilRatings).
Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.
It is the highest rating assigned by PhilRatings.
In assigning the rating, PhilRatings considered the company's ample cash flow generation that is seen to strengthen further as its energy and infrastructure projects are being completed, and improving debt position. This is considering the capital-intensive nature of its recent projects in energy and infrastructure.
In 2016, San Miguel chalked up a net income of P52 billion, up 80% from P28.9 billion in 2015 as most of its units delivered strong growth.
Excluding foreign exchange losses of P8.9 billion, consolidated income reached P61.2 billion in 2016.
Net sales for 2016 went up by 2% to P685.3 billion versus P672.2 billion a year ago; while income from operations rose 24% to P99.6 billion in 2016. – Rappler.com