SM Investments plans dollar-denominated note issuance

SM Investments Corporation (SMIC), the holding company of the Sy siblings, has announced plans to launch a dollar-denominated benchmark-sized Regulation S offering of five-year senior notes through its subsidiary, SMIC SG Holdings Pte. Ltd.

In a disclosure to the Philippine Stock Exchange (PSE), SMIC revealed it has enlisted a consortium of banks to serve as joint lead managers for a series of fixed-income investor meetings in Asia and Europe, starting on July 16, 2024.

The banks involved include HSBC, J.P. Morgan, Standard Chartered Bank, and UBS as joint lead managers and joint book-runners, with BDO Capital and Chinabank Capital also participating.

"Subject to market conditions, a USD-denominated benchmark-sized Regulation S offering of five-year senior notes by SMIC SG Holdings Pte. Ltd., guaranteed by SMIC, may follow," the company stated.

These notes are anticipated to be part of SMIC SG’s $3 billion Euro Medium Term Note Programme. The legal advisers for the issuer and guarantor are SyCip Salazar Hernandez & Gatmaitan for Philippine law and Latham & Watkins LLP for English law. The joint lead managers and joint book-runners are advised by Picazo Buyco Tan Fider & Santos Offices for Philippine law and Linklaters Singapore Pte. Ltd. for English law.

Last month, SMIC, along with its subsidiary SM Prime Holdings Inc., established a $3 billion Multi-Issuer European Medium Term Note (EMTN) Programme through SMIC SG Holdings Pte. Ltd. and SMPHI SG Holdings Pte. Ltd., respectively. This program will enable SMIC and SM Prime to access the offshore bond market to support their growth and expansion plans.

For 2024, SM Investments has allocated capital expenditures of PHP 110 billion to PHP 115 billion, a significant increase from the PHP 80 billion spent in 2023. SMIC is optimistic about its future prospects, despite adopting a cautious approach.

Franklin C. Gomez, SM Senior Vice President for Finance, mentioned that this capex figure excludes the budgets for its banking units, BDO Unibank and China Banking Corporation. The majority of the capital expenditures, amounting to PHP 100 billion, will be directed towards SM Prime Holdings Inc., which plans to launch new residential units, open additional malls, and undertake a major reclamation project in Manila Bay.

SM Prime has earmarked PHP 100 billion for its capital expenditure program for 2024, a substantial increase from the PHP 8 billion spent the previous year. This investment underscores SM Prime's commitment to driving economic growth and delivering innovative, sustainable lifestyle cities that enhance the quality of life for millions of people. Of the total capex, approximately PHP 20 billion is allocated for this year’s reclamation project budget.