Maiden debt offering worth $500M planned
MANILA, Philippines—San Miguel Energy Corp., the power generation holding firm of San Miguel Corp., plans to make a debut on the overseas bond market this week with a maiden debt offering worth up to $500 million.
The company is scheduled to conduct a global road show in Manila this week and, later, in London, sources said.
It will be the first company to take advantage of a recent upgrade in Moody’s Investor Service’s outlook on the Philippine government’s bonds.
The unlisted and unrated power-generation holding firm aims to raise between $250 million and $500 million from the offering of five-year bonds to the overseas market, San Miguel president Ramon Ang told the Inquirer.
Ang added that San Miguel had tapped British banking giant HSBC as the lead arranger of this prospective overseas debt deal.
Sources said it might be quite a challenge to bring San Miguel Energy to the overseas debt market as it still did not have a track record as a borrower. The company, however, is seen benefiting from the good credit grade of parent company San Miguel, the recent surge in optimism on San Miguel’s power business and the generally favorable environment for Philippine debt deals.
Moody’s last week changed its outlook on the Philippine government’s Ba3 foreign and local currency bond ratings to positive from stable. A positive outlook means the rating may be raised from its current level of three notches below investment grade in the next 12 to 24 months.
Other global debt watchers Standard & Poor’s and Fitch Ratings already rate Philippine sovereign debt at two notches below investment grade. S&P upgraded its rating late last year.
The five-year tenor, approximating the most liquid overseas Philippine government bond benchmark, is seen as a good maturity for San Miguel Energy’s maiden foray into the overseas debt market. By sourcing some of its requirements from the offshore market, the power unit is seen avoiding the restrictive single-borrowers limit that Philippines banks are required to keep.
The San Miguel group is raising funds in line with its transformation from a food-based to a power-based conglomerate.
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