SM Investments Corp. , the listed investment holding company of the Sy Group, said Thursday it raised USD500 million through the issuance of Euro medium-term notes that was priced at 5.466 percent, lower than initially expected due to strong demand mostly from Asian investors.
The benchmark-sized bond sale was part of the SMIC’s USD 3 billion multi-issuer EMTN program, established earlier this year. The issuance was oversubscribed 3.2 times, with final demand reaching USD 1.6 billion that represents SMIC’s largest offshore bond issuance since 2014.
“Our establishment of the pioneer EMTN program allows us to efficiently access funding with flexibility especially in times of volatility. The positive reception of this maiden issuance underscores the attractiveness of Philippine corporates to global investors,” said former Bangko Sentral ng Pilipinas Gov. Amando Tetangco, Jr., now chairman of SMIC.
The final price of the benchmark bond reflects a 135 basis points spread over the US treasury benchmark, with a coupon rate set at 5.375 per cent. The final spread tightened by 35 basis points from initial price guidance of SMIC.
The distribution of the 5-Year Notes saw significant participation from high-quality global accounts, with 87 per cent allocated to Asia and 13 per cent to Europe, Middle East and Africa. By investor type, fund managers and asset managers dominated with 83 per cent, followed by banks and financial institutions at 11 per cent, and private banks and others at 6 per cent.
The bonds were issued by SMIC unit, SMIC SG Holdings Pte. Ltd., and guaranteed by SMIC. The bond issuance was managed by HSBC, J.P. Morgan, Standard Chartered Bank, and UBS as Joint Lead Managers and Joint Bookrunners, with BDO Capital and China Bank Capital as Joint Lead Managers.
The net proceeds from the EMTN issuance will support SMIC’s general corporate purposes, further strengthening its financial position and strategic initiatives.
