August 09, 2014 — The Securities and Exchange Commission (SEC) has given its green light for SM Prime Holdings, Inc., the holding firm for Henry Sy-led property firms, to proceed with its maiden bond sale of as much as P25 billion.

This is going to be the first time that SM Prime will be tapping the debt market for fundraising.

The enlarged SM Prime is now the holding firm for the mall, residential, office and leisure businesses of the retail group.

The bonds will be sold with tenors of five years and six months, seven and/or 10 years.

In a prospectus submitted to SEC, SM Prime specified that it will issue P15 billion worth of fixed-retail bonds with an oversubscription option of up to P10 billion.

SM Prime chief financial officer Jeffrey Lim said in an earlier interview that the proceeds from the debt issuance will bankroll the company’s capital expenditures for its malls, offices and hotel operations.

FMIC is the sole issue manager for the issuance, while BDO Capital and Investments Corp., China Bank and BPI Capital Corp .are the lead underwriters.

The board of SM Prime approved the company’s said planned offering of up to P25 billion in fixed-retail bonds in May.

In June, SM Prime got the top credit rating for the said bond issue from local debt watcher Philippine Rating Services Corp. (PhilRatings).

For this year alone, the enlarged real estate firm has set a capex budget of P70 billion, while it plans to spend as much as P400 billion in the next five years.

After the bond offering, SM Prime is also mulling over a plan to tap a syndicated loan of up to $300 million by the end of this year to fund land banking activities and mall developments in China.

During the first half of this year, SM Prime posted a net income of P9.80 billion, 12 percent higher than what it had for the same period last year, while its revenues grew seven percent to P33.42 billion.