SHOPPING mall developer SM Prime Holdings Inc. (SMPH) has generated P4 billion from the issuance of a five-year floating rate note facility. The transaction was completed on Monday.

In a statement Tuesday, the company said the deal was arranged by First Metro Investment Corp. with SB Capital Investment Corp. as colead arranger. “The facility was oversubscribed with seven primary institutional lenders subscribing to the issue.

The strong response by the market to this financing illustrates the high credit quality of SMPH, as well as the local market’s confidence in the company, it said. The first drawdown, amounting to P3.5 billion, will be on June 18, while the balance of P500 million can be obtained on July 9. SM Prime said the proceeds will help fund its capital expenditures and general corporate requirements this year.

The company is spending P7 billion to build three new malls in Bacolod, Taytay and Muntinlupa, as well as expansion of malls in Cebu, Pampanga, Fairview and that of the Mall of Asia. From 2007 to 2011, SM Prime plans to spend P35 billion to fund at least 35 new malls throughout the country and expand existing businesses.

In a previous interview, president Hans T. Sy said the programmed capital expenditure is consistent of its expansion growth. “The five-year capex does not include yet the land acquisitions, he said. Jeffrey Lim, SM Prime executive vice president, said the P35-billion capex would be equally financed by borrowings and internally generated cash.

SM Prime remains the major income contributor of SM Investments Corp., the holding company controlled by the country’s wealthiest man Henry Sy.

At the end of the first quarter, its net income amounted to P1.5 billion, up 11 percent from a year earlier on higher mall rentals booked from newly opened stores.

Gross revenues, on the other hand, rose 24 percent to P3.6 billion, while rental income from the malls, which accounted for 83 percent of total revenues, grew 26 percent to P3 billion.

For the full year, the company’s net profit would likely increase between 10 percent and 15 percent on the back of higher consumer spending and continued improvement in the country’s economy.