INVESTORS swamped the P20-billion debt offering of SM Prime Holdings, Inc., raising the chances tycoon Henry Sy, Sr.’s property holding firm will exercise the oversubscription option.
 
SM Prime told the stock exchange it kicked off on Wednesday the sale of Series D and Series E retail bonds worth P15 billion, with an option to issue an additional amount of up to P5 billion. The offer will run until Nov. 13 and the issue date is set on Nov. 25.

“Deal [is] already [around 2 times] oversubscribed so we [are] convincing the client to tap [the] greenshoe and [the] challenge is to allocate to retail [investors] as offer just started,” BDO Capital & Investment Corp. Eduardo V. Francisco said in a mobile phone message yesterday.

BDO Capital is one of the joint issue managers, joint bookrunners and joint lead underwriters of the offer.

The integrated property developer set the interest rates for the Series D, 5.25-year bonds at 4.5095% per annum and Series E, 10-year retail bonds at 4.7990% per annum.

“The retail bond to be issued by SM Prime will largely support funding for our mall expansion programs in the coming years,” SM Prime President Hans T. Sy was quoted in the disclosure as saying.

“This is a testament to management’s confidence that the economic growth of the Philippines will be sustained over the medium term and will eventually have a positive impact on the provinces as growth spreads to these areas,” Mr. Sy said.

By end-2015, SM Prime will hike its mall count to 55 in the Philippines with an equivalent footprint of 7.3 million square meters (sqm.) in terms of gross floor area (GFA). Next year, the company will open six new malls and expand two existing mall, adding 571,631 sqm. to its mall space.

This is SM Prime’s second bond offering since raising P20 billion from its maiden issuance in August last year. Similar to last year’s issuance, the Series D and Series E retail bonds have been rated assigned the highest rating by Philippine Rating Services Corp.

Aside from BDO Capital, the other joint issue managers and joint bookrunners are China Banking Corporation and First Metro Investment Corp., which are also acting as joint lead underwriters together with BPI Capital Corp.

The participating underwriters are PNB Capital and Investment Corp., United Coconut Planters Bank, SB Capital Investment Corp., East West Banking Corp., RCBC Capital Corp., Land Bank of the Philippines and Philippine Commercial Capital, Inc.

SM Prime is part of SM Investments Corp., which has core businesses in retail, banking and real estate. The Sy family also has interests in gaming, geothermal energy and infrastructure.

Shares in SM Prime slid 70 centavos or 3.12% to close at P21.7 apiece on Thursday.