SY-LED property giant SM Prime Holdings, Inc. plans to sell up to P25 billion worth of retail bonds by the end of next month to partly finance business expansion and land banking, senior company officials told reporters at the end of the annual stockholders’ meeting yesterday of parent conglomerate SM Investments Corp. (SMIC) at SMX Convention Center in Pasay City.

SM PRIME Holdings, Inc. plans to open three new malls this year: in Cauayan City, Isabela and Angono, Rizal, as well as Zibo City in Shandong, China.

“We’re doing a P20-billion retail bond (sale). We are doing due diligence now. Hopefully, once it is done, (we can sell) towards the end of May,” said Jeffrey C. Lim, SM Prime executive vice-president and chief financial officer (CFO).

“If there is oversubscription, we can raise another P5 billion…”

Mr. Lim said the bonds will have seven- and 10-year tenors and will be offered in one tranche. Pricing has yet to be set.

Mr. Lim said proceeds from the bond sale will help finance construction of three more retail podiums to be build beside residential projects on top of the three that have been launched so far this year, namely: Jazz Mall in BelAir subdivision in Makati City, as well as Mezza Strip and Sun Mall both in Quezon City.

“Every residential condominium will have retail (podium) on the ground or second floor,” Mr. Lim said.

In a briefing last April 15, Mr. Lim had also cited plans to borrow a total of $300 million from banks.

Funds raised from these separate transactions, he had said then, would partly to “land-banking initiatives in China,”

SM Prime also plans to open three new malls this year: in Cauayan City, Isabela and Angono, Rizal, as well as Zibo City in Shandong, China

SMIC CFO Jose T. Sio told reporters separately yesterday that SM Prime’s debt sale will be “in line with its five-year plan,”

Launched last April 15, that plan aims to double SM Prime’s revenues and income by spending some P400 billion for capital expenditures up to 2018 to spur both mall and residential businesses.

SMIC’s property business, consolidated last year under SM Prime, consists as well of SM Development Corp.; Highlands Prime, Inc.; Costa del Hamilo, Inc.; Prime Metroestate, Inc.; and SM Hotels and Conventions Corp.

SM Prime ended 2013 with a P16.275-billion net income that was nearly flat from 2012’s P16.20 billion, burdened by a P1.27-billion “one-time restructuring cost” due to the conglomerate’s property business consolidation last year.

SMIC’s net income grew 11.16% to P38.239 billion last year from P34.401 billion in 2012, as revenues climbed 13.1% to P253.293 billion from P223.877 billion, while costs and expenses rose 14.1% to P202.008 billion from P177.000 billion. Key profit contributors were banking (43.1%), property (35.5%) and retail (21.4%) segments. – KNML