Conglomerate SM Investments Corp. said Wednesday its board approved a plan to issue as much as $500 million in seven-year dollar-denominated bonds in an exchange and new cash offering.
SM Investments said in a disclosure to the Philippine Stock Exchange that it launched an invitation to all holders of existing bonds due 2013 and 2014 to swap their existing bonds for up to a maximum principal amount of $500 million in fixed rate bonds due 2017.
“The main purpose of the transaction is to extend the maturity of some of the company’s debt maturing 2013 and 2014 to 2017 and also to take advantage of favorable market conditions,” SM Investments chief finance officer Jose Sio told the stock exchange.
In this proposed transaction, SM Investments, controlled by the family of retail tycoon Henry Sy, will invite holders of the company’s outstanding $350-million bonds due 2013 with a rate of 6.75 percent and and $500 million at 6 percent due 2014 to exchange their bonds.
The exchange offer will begin today and expire on Oct. 5, 2010. The expected settlement date is on Oct. 13, 2010.
“Depending on prevailing market conditions, SM Investments may also to tap the market for new funds by issuing new bonds to new prospective investors, which may be used for general corporate purposes,” Sio said.
The determination of the timing of the transaction, pricing and other features of the new bonds will be finalized by the company together with Citigroup Global Markets Ltd. and The Hongkong and Shanghai Banking Corp. Limited as joint dealer managers and joint lead managers and BDO Capital and Investments Corp. as joint dealer manager and co-manager of the transaction.
SM Investments, through its various operating units, has interests in banking, retail, real estate development and hotels.
Net profit in the first half grew 15 percent to P8.5 billion from P7.4 billion year-on-year while consolidated revenues increased 15 percent to P85 billion from P74 billion in 2009.
Source: Manila Standard, 23 September 2010
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