Mall operator SM Prime Holdings Inc. has started offering its P20-billion bonds for individual investors, an exercise that would partly fund the company’s capital expenditures through next year.
 
The company said that its peso-denominated series D paper, which will have a maturity of 5.25 years will have an interest rate of 4.5095 percent. Its series E of 10-year paper fetches a rate of 4.799 percent per year.
 
SM Prime will issue an aggregate principal of P15 billion in retail bonds of five- and 10-year paper with an option to issue an additional P5 billion.
 
The bonds will be offered to investors through underwriters starting November 4 and 13. The retail bonds are set to be issued to the bondholders on November 25.
 
“Proceeds of the retail bond would be used for mall expansions and to refinance company loans,” SM Prime said.
 
By the end of 2015, SM Prime will increase its number of malls to 55 in the Philippines, with an aggregate mall footprint of 7.3 million square meters in terms of floor area.
 
Next year SM Prime will open six malls and expand two existing ones. Combined together, the additional mall space will be 571,631 sq m.
 
“The SM Prime retail bond will largely support funding for our mall expansion programs in the coming years. This is a testament to management’s confidence that the country’s economic growth will be sustained over the medium term and will eventually have a positive impact on the provinces as growth spreads to these areas,” SM Prime President Hans Sy said.
 
This series of SM Prime’s debt is the second offering of peso-denominated retail bonds to the public, following its maiden offering of P20 billion in 5.5-, 7-, and 10-year bonds last year.
 
The bonds’ joint issue managers and joint bookrunners were BDO Capital and Investment Corp., China Banking Corp. and First Metro Investment Corp.
 
The company’s income rose P22.9 billion for the three quarters of the year ending September, up from last year’s P13.81 billion. The figure, however, included a P7.4 billion in one-time trading gains on its securities that it booked during the first quarter.
 
Stripping that gain, the company said that its profit only grew by 15 percent to P15.5 billion from the previous year.
 
For the third quarter alone, it also had 15-percent income growth to P4.2 billion from last year’s P3.77 billion.
 
Consolidated revenues rose 9 percent to P52.2 billion for the nine-month period ending September from last year’s P47.79 billion.