SM Investments sells $500 million worth of bonds

The Sy family’s flagship SM Investments Corporation raised $500 million via a drawdown from its $3 billion multi-issuer Euro Medium-Term Notes (EMTN) program, established in May this year, according to a report by Manila Bulletin.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said the notes will be listed on the Singapore Exchange Securities Trading Limited (SGX-ST).

The issuance was 3.2 times oversubscribed, with final demand reaching $1.6 billion, marking SM Investments’ largest offshore bond issuance since 2014.

“Our establishment of the pioneer EMTN program allows us to efficiently access funding with flexibility especially in times of volatility,” said SM Investments Chairman Amando Tetangco Jr.

He added that “we believe that the positive reception of this maiden issuance is a testament to the investability of quality Philippine corporates.”

The notes were priced at a yield of 5.466 percent, 135 basis points above the US treasury benchmark, and carry a coupon rate of 5.375 percent. The final spread represents a 35-basis-point tightening from initial price guidance.

The five-year Notes were distributed to high-quality global accounts. By geography, the five-year notes were distributed 87 percent to Asia and 13 percent to EMEA.

By investor type, the 5-year notes were distributed 83 percent to fund managers or asset managers, 11 percent to banks or financial institutions, and six percent to private banks and others.

Issued by SM Investments’ wholly owned subsidiary, SMIC SG Holdings Pte. Ltd., the notes are guaranteed by SM Investments.

HSBC, J.P. Morgan, Standard Chartered Bank, and UBS have been mandated by SM Investments as Joint Lead Managers and Joint Bookrunners, alongside BDO Capital and China Bank Capital as Joint Lead Managers.

The net proceeds from the EMTN issue will be allocated for general corporate purposes.

SM Investments is one of the leading Philippine companies. It invests in market-leading businesses in retail, banking, and property and in ventures that capture high growth opportunities in the emerging Philippine economy.

SM’s retail operations are the country’s largest and most diversified, consisting of grocery stores, department stores and specialty retail stores.

Its property arm, SM Prime Holdings Inc., is the largest integrated property developer in the Philippines, with interests in malls, residences, offices, hotels, convention centers, and tourism-related property developments.

SM’s interests in banking are in BDO Unibank Inc., the country’s largest bank, and China Banking Corporation, the fourth-largest private domestic bank.