SMC’s Power Unit To Issue Bonds Worth P30-Billion | Marvin Germo

SMC’s Power Unit To Issue Bonds Worth P30-Billion

By: Marvin Germo | April 3, 2019

Opporunities For Investors

For existing and new investors out there, this is a good news for you! SMC Global Power Holdings Corporation, the power unit of SMC, has begun to offer P30 billion worth of fixed rate bonds of which P25 billion serves as the base while the P5 billion is for oversubscription. Last March 29, the firm has received its Certificate of Permit to Offer Securities for Sale from SEC which allows them to start offering the bonds to investors. If you are interested to invest in bonds, this is the best time to see how SMC can make you a successful investor.

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Stock Smarts Cebu —  April 6 & 7, 2019
Investing Insights Japan – April 13, 2019
Stock Smarts Singapore —  May 18 & 19, 2019
Investment Conference 2019 – May 25, 2019
Stock Smarts Manila —  June 15, 16, 22, 23, & 29, 2019
Stock Smarts Iloilo – July 6 & 7, 2019
Stock Smarts Cagayan De Oro – July 20 & 21, 2019
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Stock Smarts UAE – August 30 – September 3, 2019
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Stock Smarts Taiwan – November 2, 2019

Purpose of Bond Issuance

The purpose of the bond issuance is to partially repay the existing loans of the unit and its other investments. The proceeds will also be allocated to the re-denomination of the firm’s obligations in US dollars amounting to P14.13 billion. P15.31 of the proceeds will be invested to its power-related assets. The bonds to be issued consists of three different bonds namely Series H with 3 years maturity at 6.8350% per year, Series I with 5 years maturity at 7.1783% per year, and Series J with 7 years maturity at 7.6% per year. The amounts of these bonds are P10.246 billion, P8.476 billion, and P6.276 billion respectively. The net proceed the company can generate from the issuance amounts to P29.617 billion if the oversubscription is fully issued.

Fund Manager

The date of the offer runs until April 12 and will be issued on April 24 which will be listed on PDEx thereafter. The joint fund managers, underwriters, and bookrunners are BDO Capital & Investment Corporation, Chinabank Capital Corporation, BPI Capital Corporation, RCBC Capital Corporation, PNB Capital and Investment Corporation, and SB Capital Investment Corporation. While the firm has outstanding P50 billion bonds in fixed income exchange, this will be the first pool of the P60-billion shelf registration of the SMC Global Power. If you’re wondering about the debt rating, the firm’s bonds has a PRS Aaa rating, which means that the bonds are offered with the highest quality with little credit risk.

SMC Global Power Net Income

In 2018, SMC’s unit power has generated an operating income of P33.17 billion, which is considerably 37% higher than last year. This is followed by 45% hike or P120.10 billion in consolidate revenues during 2018. The firm had noted that the volume consumed grew by 39% because of the extra power generated from its plants in Mansiloc, Limay, Malita, San Roque, and Ilijan. With the plan of raising funds from issuing bonds, the firm has a positive outlook towards the next 12 months. On April 2, 2019, the shares of SMC close at P175 each.

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