SMGP plans $300-M perpetual bond sale for refinancing, renewables

SAN MIGUEL Global Power Holdings Corp. (SMGP), the power generation arm of San Miguel Corp. (SMC), plans to return to the offshore debt market with the issuance of up to $300 million in senior perpetual capital securities to refinance existing obligations and fund renewable energy projects.

In a disclosure to the Philippine Dealing & Exchange Corp. on Tuesday, SMGP said its board of directors approved the offer and issuance of the securities, which will be listed on the Singapore Exchange Securities Trading Ltd.

The company said the proceeds will be used to purchase and redeem its outstanding senior perpetual capital securities issued on Jan. 21, 2020, which carry an initial distribution rate of 5.7%.

Part of the funds will also be used to finance the pre-development of solar and hydropower projects, as well as capital expenditures related to battery energy storage system projects.

Through its wholly owned subsidiary SMC Global Light and Power Corp., SMGP is developing solar power projects with a combined capacity of about 2,670 megawatts across various sites in Luzon and Mindanao. These projects, located in Bataan, Davao, Bulacan, and Isabela, are targeted for completion through 2029.

“For the avoidance of doubt, the net proceeds will not be applied in connection with any of the Corporation’s and its subsidiaries’ existing and planned coal-fired power assets and/or liquefied natural gas assets,” SMGP said.

Standard Chartered Bank was appointed as sole lead manager, while DB Trustees (Hong Kong) Ltd. will serve as trustee. Deutsche Bank Aktiengesellschaft, Hong Kong Branch, was named principal paying agent, calculation agent, transfer agent, and registrar. Latham & Watkins was tapped as listing agent.

SMGP currently supplies about 20% of the national grid, with a total installed capacity of 5,710 megawatts.

On Wednesday, shares of SMC rose 0.06% to close at P85 apiece. — Sheldeen Joy Talavera