SMC’s Power Unit is Offering Bonds for P50K, With Up to 7.6% Return a Year
SMC Global Power Holdings Corp., the power subsidiary of San Miguel Corporation, is offering up to P30-billion worth of fixed-rate bonds to be issued in three series with varying maturity dates and tenors.
Interested investors can choose between the 3-year Series H bonds due in 2022, the 5-year Series I bonds due in 2024, and the 7-year Series J bonds due in 2026.
The Series H will yield an annual interest rate of 6.8350 percent while the Series I will bear 7.1783-percent interest. The Series J, which will take the longest to mature, will yield the highest annual returns among the three at 7.6 percent.
The rates of Series I and Series J are significantly higher than the latest coupon rates on fixed-rate treasury bonds offered by the government, which stand at 6.875 percent. However, the government treasury bond offering will take 10 years to mature—longer than all the tenors offered by SMC Global Power Holdings Corp.
The offer period will end on April 12, Friday, at 5 p.m., and the offered bonds are scheduled to be issued on April 24, Wednesday. The minimum investment is priced at P50,000 each. Additional placements can be made in increments of P10,000.
Those who are interested can go to BDO Capital, BPI Capital, China Bank Capital, PNB Capital, RCBC Capital, or SB Capital. These banks all serve as both the joint issue managers and joint lead underwriters/bookrunners of the offering.
Philippine Rating Services Corporation (PhilRatings) gave SMC Global Power Holdings' offer bonds a rating of PRS Aaa, the highest corporate credit grade on the PRS scale. This means PhilRatings believes SMC's power unit has a “very strong capacity to meet its financial commitments.”
However, interested investors are encouraged to read through the offer supplement or seek financial advice first before making any investment decisions. Unlike bank deposits, placements in any retail bonds do not have insurance protection and are subject to a set of risks.
The entire proceeds of the offer will go to the partial refinancing of the company's existing loans, investments in power-related assets, and payment of related transactions fees and expenses.