Funds for investment, prepayment of debt
MANILA, Philippines—San Miguel Corp.’s power-generation unit has debuted in the offshore bond market with a five-year offering likely to carry an annual interest rate of a low 7 percent, industry sources said Wednesday.
Wholly owned SMC Global Power Holdings Corp., which is looking at issuing as much as $500 million, plans to use the proceeds to finance investments in power-related assets, finance payment or possibly prepay the group’s obligations to the state-owned Power Sector Assets and Liabilities Management Corp.
The power unit has mandated ANZ, HSBC and Standard Chartered Bank as joint bookrunners and joint lead managers for the maiden dollar offering, San Miguel confirmed to the Philippine Stock Exchange Wednesday.
The unlisted SMC Global Power is the group’s holding firm for all power-related units such as San Miguel Energy Corp., Strategic Power Development Corp. and South Premiere Power Corp.
“SMC Global Power has filed an application for the listing of the bond issue with Singapore Exchange Securities Trading Ltd. and does not intend to register any securities subject of the proposed bond issue under the US Securities Act and the Philippine Securities Regulation Code,” the disclosure said.
No offering of securities will be made in the United States, the Philippines or in any other jurisdiction where such an offering is restricted or prohibited, it added.
An interest rate of 7 percent on a five-year offshore bond is not cheap, but is seen sufficient to meet the requirements of the power unit, which is an unlisted and unrated borrower.
San Miguel’s four power plants—Sual, Limay, San Roque and Ilijan—generated an estimated 7.4 million megawatt-hours from January to September last year, registering total revenues of P45.2 billion while operating income reached P5.73 billion.
The foray into the higher-yielding but capital-intensive power business is seen driving San Miguel’s growth in the years ahead.
The power unit has mandated ANZ, HSBC and Standard Chartered Bank as joint bookrunners and joint lead managers for the maiden dollar offering, San Miguel confirmed to the Philippine Stock Exchange Wednesday.
The unlisted SMC Global Power is the group’s holding firm for all power-related units such as San Miguel Energy Corp., Strategic Power Development Corp. and South Premiere Power Corp.
“SMC Global Power has filed an application for the listing of the bond issue with Singapore Exchange Securities Trading Ltd. and does not intend to register any securities subject of the proposed bond issue under the US Securities Act and the Philippine Securities Regulation Code,” the disclosure said.
No offering of securities will be made in the United States, the Philippines or in any other jurisdiction where such an offering is restricted or prohibited, it added.
An interest rate of 7 percent on a five-year offshore bond is not cheap, but is seen sufficient to meet the requirements of the power unit, which is an unlisted and unrated borrower.
San Miguel’s four power plants—Sual, Limay, San Roque and Ilijan—generated an estimated 7.4 million megawatt-hours from January to September last year, registering total revenues of P45.2 billion while operating income reached P5.73 billion.
The foray into the higher-yielding but capital-intensive power business is seen driving San Miguel’s growth in the years ahead.
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