MANILA, Philippines – Integrated property firm SM Prime Holdings Inc. has secured the highest credit score for its planned P25-billion maiden bond offering.

SM Prime’s debut in the bond market, which would support expansion projects and long-term growth, was boosted by a PRS Aaa rating from Philippine Rating Services Corp. (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,” PhilRatings said.

The umbrella property firm of tycoon Henry Sy has proposed a bond issue of P15 billion, with an oversubscription option of up to P10 billion to cater to strong demand. The PRS Aaa rating was assigned for a total bond issue amount of P25 billion with a tenor of five years and six months, seven and 10 years.

The local credit rater said it took note of the listed integrated property firm’s “established brand name and operational track record, enhanced by synergies among the SM Group of companies and the positive outlook across its core business segments, supported by strong macro-economic fundamentals.”

PhilRatings said SM Prime is also a beneficiary of a highly-experienced management and solid financial profile characterized by sound liquidity, stable profitability and a conservative capital structure.

“All the big underwriters are supportive. There is a high chance the desired amount can be mobilized in the market,” said Roberto Juanchito Dispo, president of underwriter First Metro Investment Corp.

“(SM Prime’s) business model is solid. They are into residential condominium, retail, and tourism because of hotel. Essentially, the Philippine growth story is weaved into their business model,” Dispo said.

PhilRatings said the consolidation of SM’s real estate properties made it one of the biggest integrated developers in Southeast Asia with a strong position domestically and a growing mall operation in China.

“SM Prime’s performance is supported by the country’s sound macro-economic fundamentals, and its growing retail and real estate industries,” PhilRatings said.

The umbrella property firm posted a double-digit profit growth in the first quarter as the strength of the rental business offset the poor performance of the residential segment.

Consolidated net income of the integrated property firm climbed 11 percent to P4.58 billion for the first three months of 2014, from P4.11 billion a year ago while consolidated revenues improved three percent to P15.35 billion from P14.95 billion year-on-year.

PhilRatings said its issuer score is based on available information and projections at the time of the rating review.

“PhilRatings shall continuously monitor developments relating to SM Prime and may change the rating at any time, should circumstances warrant a change,” it added.

SM Prime aims to double its income and revenues in the next five years as it grows its office, mall, leisure, hotel and residential portfolio by two-fold in the same period. It allotted P400 billion in the medium term to support its expansion in the Philippines, in China and in Southeast Asia.