(16 April 2012. Pasay City, Philippines.) Philippine conglomerate SM Investments Corporation (SM) disclosed today that its proposed Php10.0 billion fixed-rate bond issue, with an option for oversubscription by another Php5.0 billion, received a rating of PRS Aaa from the Philippine Rating Services Corporation (PhilRatings). Aaa is the highest rating assigned by PhilRatings to obligations that are of the utmost quality with minimal credit risk. It is also assigned to issuing companies with an extremely strong ability to meet its financial obligations.
"The ratings reflect SM’s diversified portfolio, which includes core companies with strong market position, sustained earnings and recurring cash flows; its solid brand equity and experienced management team; strong liquidity; and sound capitalization. The ratings also consider the continued positive prospects for the Philippine economy, in general, and the industries where the SM Group has primary investments, in particular,” PhilRatings explained in its 16 April 2012 report. "The rating for SM’s outstanding Php10.0 billion bonds (issued in June 2009) was likewise maintained at PRS Aaa,” PhilRatings added.
The proposed Php10.0 billion fixed-rate bonds will be offered in two tranches, with tenors of 10 and 15 years. SM has appointed BDO Capital and Investment Corp. and First Metro Investment Corp. as co-lead managers for the offering. The proceeds of the bonds will be used for general corporate purposes. SM’s board of directors also authorized the management to negotiate and finalize the terms and conditions, including pricing and any increase in issuance amount, and execute any and all documents necessary, to implement the bond issue.
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