Philippine beermaker San Miguel to launch $464M bonds

San Miguel Brewery Inc. plans to launch US$464.68 million fixed rate bonds within the month.

The offering for SMB bonds may start this month, following the completion of the P180-billion treasury trade bonds of the national government, according to Eduardo Francisco, president of BDO Capital which was tapped as one of the underwriters. 

“We are working together with San Miguel and other underwriters because the focus before was on RTB. So we’ll let the RTB issue do well first and now we’ll work on San Miguel Brewery bonds offering,” Francisco said.

The rates for the bonds, however, are still being finalized in the light of the recent Monetary Board decision to cut interest rates by 25 basis points.

The proposed issuance would have three tenors: five years and one day, seven years and 10 years.

ING Bank NV was tapped as the issue manager for the offering while BDO Capital, Hongkong and Shanghai Banking Corp., SB Capital and Standard Chartered Bank would serve as joint underwriters.

Proceeds from the proposed bonds would refinance the company’s current and upcoming maturities. These include a portion of an outstanding P38.8- billion bond issue worth P13.59 billion, which will mature on April 3 this year and a $300-million term facility.

The SMB’s P20-billion bond offering had obtained a triple-A credit rating from Philippine Rating Services Corp.

This rating means the bonds were deemed “of the highest quality with minimal credit risk” and that the borrower’s capacity to meet its financial commitment on the obligation was “extremely strong.”

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