SM Investments sets initial P10 billion bond sale

SM Investments Corp. (SMIC), the listed conglomerate of the Sy Group, will issue an initial P10 billion in bonds out of a planned offering of P30 billion over the next three years.

SMIC reduced the size of the initial offer to P10 billion from an earlier plan of P15 billion.

According to the amended prospectus filed with the Securities and Exchange Commission, the offer will consist of P5 billion as base offer and another P5 billion as oversubscription option.


The previous offer was P10 billion in base offer and P5 billion for oversubscription. The tenor will be three years and six months instead of three, five and seven years.

Philippine Ratings Services Corp (PhilRatings), the local debt watcher, has assigned a rating of PRS Aaa to this initial tranche.

PRS Aaa is the highest rating assigned by PhilRatings, denoting that such obligations are of the highest quality with minimal credit risk and that the issuing company’s capacity to meet its financial commitment on the obligations is extremely strong.

SMIC reported a consolidated net income of P7.1 billion in the first half of the year, down 69 percent as some of its businesses were hit by the negative impact of the coronavirus disease 2019 or COVID-19 pandemic.

On the other hand, consolidated revenue declined 21 percent to P185.5 billion.

Among the different business segments, property and banking businesses accounted for 61 percent and 34 percent while retail accounted for five percent.

Non-food retail saw a marked decline with net income falling to P522 million from P5.7 billion a year ago. SM Retail reported revenues of P139.2 billion, lower by 18 percent.

Property arm SM Prime Holdings posted a consolidated net income of P10.4 billion, down 46 percent year on year as consolidated revenues fell 23 percent to P43.7 billion.

SM Prime’s residential business, led by SM Development Corp. (SMDC), on the other hand, recorded P23.7 billion in revenue, up 11 percent.

The banking business BDO Unibank Inc. (BDO) posted lower profits of P4.3 billion compared to P20 billion as it booked  P22.4 billion in total provisions.

By: Iris Gonzales (The Philippine Star )

Source: Peso Economics