AWASH WITH cash, the Henry Sy-led SM mall and banking group will repay creditors a total of $250 million this month, two years ahead of the maturity of a total $300 million in bonds issued three years ago.

“[Creditors holding] $250 million in bonds did not wait for the maturity because if they keep them, they only earn 3.5% a year,” said Jose T. Sio, chief finance officer of SM Investments Corp., in an interview. “So they might as well get their money and invest it in notes.”

On March 19, 2007, SM Investments sold $300 million worth of five-year convertible bonds due on March 20, 2012.

Proceeds of the sale of the bonds, which were listed in Singapore, were used to refinance a portion of maturing liabilities and for general corporate expenses.

“For this $250 million [repayment], we can pay in cash, we have the ready funds,” Mr. Sio said, adding that the SM group has $1 billion in cash to date.

Creditors holding the remaining $50 million may keep the bonds for two more years, with the option of converting them into shares in SM Investments, he added.

Bondholders were given an option on March 19 to avail themselves of an early redemption option at a fixed price of 110.97%. Bonds that will be redeemed upon maturity will be paid at 118.96% of the principal amount.

Meanwhile, the SM group is also looking at fast-tracking the opening of new malls in China to as much as three every year from the current rate of one every year.

This will allow the conglomerate to assemble a bigger project portfolio that can be listed overseas at a date earlier than expected.

“We will accelerate [construction]. From one mall a year, we will accelerate that … maybe two or three,” Mr. Sio said. “We will plan it first. We will watch what the Chinese government will do because they are having elections now,” Mr. Sio said in Filipino.

Last year, listed SM Prime Holdings, Inc., the mall development arm of SM Investments, said it would increase the number of malls in China before going public after a five-year period, much like the strategy it had executed in the Philippines.

“The China project will wait until we have some bigger [developments]. If [the number of malls is] small, we will not be noticed there,” Mr. Sio said.

The SM group is looking at building and operating eight to 10 malls in China before listing abroad, possibly in 2012.

At the end of the year, SM Prime Holdings will have 41 local malls with a total floor area of 4.5 million square meters, as well as four malls in China — Xiamen, Jinjiang, Chengdu and Suzhou. Two more China malls, one each in Chongquing and Zibo, are under construction.

Late last year, the SM group said it was looking at listing unit SM Land (China), Ltd. in Singapore, Shanghai or Hong Kong.

Shares in SM Investments rose by P2.50 yesterday, closing at P367.50 each from P365.00 per share on Friday.