Tuesday, January 25, 2011

San Miguel unit raises $300M

Power firm’s offshore bond issue to pay 7% a year
By Doris Dumlao
Philippine Daily Inquirer
First Posted 22:38:00 01/25/2011

MANILA, Philippines—The unlisted power-generation unit of diversifying conglomerate San Miguel Corp. has raised $300 million in fresh funds for expansion and debt refinancing from a recent offshore bond debut.
The maiden bond offer of wholly owned SMC Global Power Holdings Corp. carrying a five-year tenor was priced at par on Friday to pay a yield of 7 percent a year, according to industry sources privy to the issuance.
The issuance was within San Miguel group’s earlier target size of $250 million to $500 million but the interest rate was a bit steeper compared to earlier expectations as the offering was priced when the global bond market was weak.
Around 38 percent of the bonds were sold to investors from the Philippines, 37 percent to Asians and the remaining 25 percent to Europeans. The bonds were not offered in the United States.
ANZ, HSBC and Standard Chartered Bank were joint bookrunners and lead managers for the deal.
The unlisted SMC Global Power is the San Miguel group’s holding firm for all power-related units such as San Miguel Energy Corp., Strategic Power Development Corp. and South Premiere Power Corp.
The San Miguel group 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.
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.

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