1 month ago
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SM Prime Holdings, Inc., the property development arm of Sy-led SM Investments Corporation, has set the interest rates for its ₱25 billion Peso-denominated Fixed Rate Bonds to be offered from from February 12 to February 18, 2025.
In a disclosure to the Philippine Stock Exchange, the firm said the rate for the Series Y bonds due on 2028 has been set at 6.0282 percent; Series Z due on 2031 at 6.2113 percent; and Series AA due on 2035 at 6.4784 percent.
SM Prime said it will issue an aggregate principal amount of ₱20 billion, with oversubscription option of up to ₱5 billion. This is the second tranche under the company’s ₱100 billion Shelf Registration of Fixed Rates Bonds approved by the Securities and Exchange Commission SEC on June 6, 2024.
The first tranche of ₱25 billion was listed at the Philippine Dealing and Exchange Corp. (PDEx) on June 24, 2024. This consisted of Series V, W, and X due in 2027, 2029, and 2031, respectively.
“The successful listing of SM Prime's Fixed Rate Retail Bond Series V, W, and X have been met with overwhelming demand from the investing public, resulting in a three-fold oversubscription that has allowed us to raise an impressive ₱25 billion,” SM Prime Chief Finance Officer John Nai Peng C. Ong said.
Similar to its previous bond issues, the Series Y, Z and AA have been rated PRS Aaa by Philippine Rating Services Corporation (PhilRatings).
PRS Aaa rating is the highest rating assigned by PhilRatings, denoting that such obligations are of the highest quality with minimal credit risk and the issuing company ‘s capacity to meet its financial commitment on the obligations is extremely strong.
PhilRatings said the rating for SMPH’s outstanding bonds amounting to ₱137.8 billion was likewise maintained at PRS Aaa. PhilRatings assigned a Stable outlook for the ratings of the proposed and outstanding bonds.
SM Prime is increasing its capital expenditures to ₱100 billion to ₱110 billion this year as it continues to expand its core businesses.
SM Prime President Jeffrey Lim said the company continues to expand its product offerings and is slated to open at least four, maybe even five, new malls in 2025. These will be in La Union, Zamboanga, Laoag, and Sta. Rosa, Laguna near Nuvali.
Aside from new malls in the pipeline, SM Prime is also spending for the expansion and renovation of its existing malls.
SM Prime said it is allotting up to ₱33 billion for capital expenditures this year as it continues to expand its recurring income portfolio.
The firm said the additional investment in its commercial property businesses is driven by expectations of a sustained recovery in consumer demand and forecast of over six percent growth by the Philippine government.
"We expect moderating inflation, easing interest rates and election-related spending to fuel our growth in 2025. Our malls should do well and our office, hotel and convention centers could provide additional upside," said Lim, highlighting the company's strong outlook.
He noted that election-related expenditures, a cyclical driver of economic expansion in the Philippines, are anticipated to stimulate aggregate demand and spending in various sectors, particularly retail.
The firm has earmarked approximately ₱21 billion for the expansion of its malls' gross floor area (GFA) to 8.08 million square meters by the end of the year.
New developments will add 205,400 square meters of GFA, while 124,488 square meters of existing mall space will undergo redevelopment.
Recognizing the potential of Philippine tourism, SM Prime said it will invest around ₱6 billion in its hospitality and MICE businesses to build two convention facilities, renovate hotel rooms and add new food and beverage facilities in existing hotels.
Meanwhile, driven by robust demand and gains in lease take-up of existing inventory, SM Offices is investing ₱6 billion to develop new office towers and work spaces.
This includes Six E-Com Center, a two-tower, Grade A office complex within the Mall of Asia Complex. Six E-Com Center is designed to cater to technology-driven industries and business process outsourcing (BPO) firms.
