SM Prime Holdings Inc., the country’s largest property developer, said it will issue up to P70 billion bonds aimed at individual investors in the next three years to partly fund its P180-billion capital expenditures (capex) through 2018.
Jeffrey Lim, SM Prime executive vice president, said the company will apply with the Securities and Exchange Commission for the three-year shelf registration of between P50 billion and P70 billion worth of bonds.
The bonds will have a tenor of 10 years or more and will be issued over a three-year period, with the first tranche to be floated in the third quarter of the year, Lim said at the sidelines of the company’s stockholders’ meeting.
“The idea is a third of our capex will be funded by the bonds,” Lim said.
He said the company has all used up its single borrower’s limit from the banks.
SM Prime, known for its chain of malls all over the country, is earmarking some P60 billion in capital expenditures for the next three years starting in 2016.
“Overall, we are committed to earmark P60 billion annually over the next three years to achieve our development roadmap and income targets by 2018. We are confident that, with your support, we are on our way to realizing our vision,” said SM Prime President Hans Sy.
SM Prime is aiming to double its net income to P32 billion by 2018 from P16 billion in 2014 when the SM group consolidated all of its property businesses under SM Prime.
Sy said while earnings started the year a bit slow, it began to pick up in February.
“April is still very much on track,” he said.
He said the firm will continue to build new malls while expanding existing malls. For this year, SM Prime will open new malls in Trece Martires in Cavite; San Jose del Monte, Bulacan; Cherry Congressional; Cherry Antipolo; and East Ortigas.
SM Prime will also be redeveloping portions of its Mall of Asia complex, investing P1.5 billion to increase its retail area to 700,000 square meters—making it the biggest mall in the country.
Also up for expansion is SM Clark in Pampanga, which will be expanded to include office space for the business process outsourcing sector.
For its residential development business, the company said it will be expanding its product offerings from its core offering of affordable condominiums.
Image credits: Nonie Reyes