San Miguel Power Unit Raises P40B From Bond Sale

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SMC Global Power Holdings Corp. (SMCGP), the energy arm of conglomerate San Miguel Corp., raised 40 billion pesos through the sale of fixed-rate bonds.

The bond issue involves issuing 30 billion pesos, with an oversubscription of up to 10 billion pesos. It represents the first tranche of the company’s registered three-year program of 60 billion pesos.
SMCGP said the latest transaction “has generated significant interest from investors,” prompting them to issue more bonds.

Philippine Rating Services Corp. (PhilRatings) has assigned an issue credit rating of PRS Aaa with a stable outlook.

PhilRatings explained that debt rated with PRS Aaa was considered to be of the “best quality with minimal credit risk”, while a stable outlook means the rating should be maintained for the next 12 months.

The local debt watchdog awarded the highest rating based on SMCGP’s leading position in the market, with a solid platform for expansion and strong support from its parent company SMC.

He also considered the stability of earnings and substantial cash flow, supported by the company’s long-term offtake contracts, although margins are declining, as well as its conservative capital structure given its a capital-intensive industry.

“The funds provided by these bonds come at an opportune time as we continue our commitment to providing the country with reliable power supply, amid the current challenges of the global fuel market,” said SMC Chairman and CEO Ramon. Eng.

Amid the global cost of fuel and supply difficulties caused by the ongoing conflict between Russia and Ukraine, SMC’s energy business said it remained on track to minimize the country’s dependence on coal as part of its parent company’s sustainability goals.

Last month, SMCGP completed construction of a 500 megawatt-hour (MWh) battery energy storage system (BESS) facility, the largest of its kind in Southeast Asia.

Ang said SMCGP plans to increase the total battery capacity by the end of the year to 700 MWh and 1,000 MWh by the end of 2023, once all 32 BESS facilities come online.

He also said the company’s BESS network, dubbed “by far the first and largest battery network in the Philippines”, would be critical to ensuring reliable power supply across the country, even in remote areas.

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