SMC Power to sell P15-billion bonds

by Madelaine B. Miraflor April 19, 2016
http://www.mb.com.ph/smc-power-to-sell-p15-billion-bonds/

The approval of the Securities and Exchange Commission (SEC) had been sought by SMC Global Power Holdings, Corp., the power generation arm of listed conglomerate San Miguel Corp., (SMC) for its plan to sell bonds in order to raise P15 billion, just enough for the company to be able to pay its maturing debt and fund its general corporate purposes.

In a prospectus submitted to the SEC on Monday afternoon, SMC Global Power said it intends to offer fixed-rate bonds with five, seven and 10-year tenors.

Proceeds from the bond sale will be largely used by the company to refinance its short-term loan provided by BDO Unibank, Inc., of which the proceeds were used to fully redeem the firm’s US$300 million 7.0 percent Notes due 2016.

The remaining amount will fund the company’s general corporate purposes, including operations-related.

BDO Capital & Investment Corp., Maybank ATR Kim Eng Capital Partners, Inc., BPI Capital Corp., China Bank Capital Corp., PNB Capital and Investment Corp., RCBC Capital Corp., SB Capital Investment Corp., Standard Chartered Bank and United Coconut Planters Bank were hired as joint issue managers, joint lead underwriters and bookrunners for the deal.

The company has yet to identify the offer period and issue date for the transaction.

SMC Global Power is one of the largest power companies in the Philippines, controlling 2,903 megawatts (MW) of combined contracted capacity as of December 31, 2015 and which benefits from diversified fuel sources, including natural gas, coal and hydroelectric.

Based on a data from Energy Regulatory Commission, SMC Global Power had a 17 percent market share of the power supply of the national grid, and a 22 percent market share of the Luzon grid.

It was just last month when the SEC allowed SMC to sell up to P73 billion worth of preferred shares over a period of three years.

As part of the shelf-registration, SMC initially raised P30 billion to mainly pay its US dollar-denominated obligations.

In September last year, SMC also raised P33.5 billion after selling preferred shares at P75 apiece. It was also used to partially refinance the firm’s maturing debts.