SMC LISTED FIXED-RATED BONDS | Marvin Germo

SMC LISTED FIXED-RATED BONDS

By: Marvin Germo | October 5, 2019

Successful Listing Of Bonds

San Miguel Corporation (SMC) will soon offer another of bonds as it has successfully listed its fixed-rate bonds worth P10-billion at the Philippine Dealing & Exchange (PDEx) last October 4. The famous conglomerate conducted a listing ceremony in Makati City during the said date to officially launch its activity for fundraising. According to the firm, it will be the last portion of its P60-billion shelf registration. This listing is for five-year Series H bonds and will be due in 2024. This will have a fixed rate of 5.55%. The minimum denominations will be P50,000 with integral multiples of P10,000, which then will be traded in P10,000 denominations in the secondary market.

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Uses Of Proceeds

For the first option of redeeming a preferred share issue, the plan of SMC is to initially fund it through a bridge loan. In fact, it put the amount at P6,782,115,000 by October of this year. For the refinancing or re-denomination of its current loan obligation, the estimated amount is P3,093,935,000 and it will be given out within 6 months from its issue date. SMC is thinking to invest the net proceeds it will get from the offer in short-term liquid investments such as short-term government securities, money market placements, and bank deposits. These are expected to earn at prevailing market rates.

About The Bond

The company also expects that there will be investment losses and should there be any shortfalls, the Company is ready to finance it from its internally generated funds. This new bond offering is already the 4th offer and the last portion of the P60-billion fixed-rate bonds shelf registration of SMC to be issued. As planned, it was listed on October 4 and will be due by 2024. SMC disclosed all of this information in order to educate investors about its last tranche its total bond offering. It’s also important that investors are aware of what SMC is planning to plan their strategies more effectively in the market.

SEC Provided Bond Approval

Last September 20, the Securities and Exchange Commission provided the approval to San Miguel Corporation (SMC) for its P10-billion fixed-rate bond issue, which is a tranche of its P60-billion shelf registration. This current news is in response to SMC’s registration of a planned issue of bonds. Before this listing, it can be noted that SEC provided its go signal first. Per the rating of Philratings, the bonds are at PRS Aaa rating. This rating is an indication that the bonds listed are good and investors will surely benefit from the last tranche SMC can offer.

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