SM Prime Holdings, Inc., one of Southeast Asia’s biggest integrated property developers, is planning to use the P9.91 billion proceeds of its planned bond offering to partly fund the construction of 8 office towers and five hotels.
 
In a disclosure, SM Prime said the initial offering of P5 billion in bonds will help fund the construction of SM Clark BPO Towers, SM Sta. Rosa BPO, and SM Iloilo Tower as well as Conrad Manila, SMX Conventions SRP Cebu, SM Hotels North EDSA, SM Hotels Mall of Asia, and MOA Serviced Apartments.
 
The oversubscription option of P5 billion, if exercised, will help fund Three E-com Center Four E-com Center, SRP Cebu-Building 1, Cyber Building 1 and Six E-com Center.
 
“Any shortfall in the net proceeds for the intended uses described above shall be funded by the issuer [SM Prime] from internal sources such as cash flows generated from operations or availments from credit facilities provided… by various financial institutions,” SM Prime said.
 
On Friday, the Securities and Exchange Commission (SEC) already received SM Prime’s registration statement for the said issuance, which will serve as the initial tranche of the company’s proposed 3-year Debt Securities Program (DSP) of up to P60.0 billion.
 
It was also early last week when the P10 billion worth of bonds have been given the top issue credit rating of PRS Aaa 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. A Stable outlook, on the other hand, indicates that the rating is likely to be maintained or to remain unchanged in the next 12 months.
 
PhilRatings said SM Prime’s rating reflects its strong financial profile; solid brand equity and very good operational track record; and well diversified portfolio, with components that complement each other.
 
It also factored in SM Prime’s continuous aggressive construction and expansion of development projects leading to significant growth going forward.