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SM Prime Holdings (SMPH) offers Retail Bonds




The Philippines’ largest property developer, SM Prime Holdings (SMPH), is conducting a P25-billion retail bonds offering, running from August 13 until 22.

A bond is a fixed-income instrument that represents the obligation of the borrower (bond issuer) to pay the lender (bondholder) a specific amount of money at specified times in the future.

Series A, B and C Bonds

In the case of SMPH, the company will issue three sets of bonds with varying maturity periods and corresponding interest rates:

  • Series A — annual interest rate of 5.1% maturing in 5 and 1/2 years
  • Series B — annual interest rate of 5.2006% maturing in 7 years
  • Series C — annual interest rate of 5.7417% maturing in 10 years

The computation of interest income is explained in our Bond Investing Guide article about How to make money with Bonds.

Use of Proceeds and Offer Period

SMPH plans to raise an aggregate principal amount of P15 billion from the issuance of its Series A, B and C bonds, with an option to issue an additional amount of up to P10 billion — for a total of P25 billion.

Proceeds of the bond offering will be used for the “expansion of malls, offices and hotel operations,” as per the company’s official statement.

Investors may participate in the offering until August 22, 2014. Bonds will be issued starting September 1.

Interested investors may inquire with BDO Capital & Investment Corp. and First Metro Investment Corp., joint issue managers and joint bookrunners of SMPH’s bond offer. They may also ask the Trust and Asset Management divisions of other banks in the Philippines for more information.

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