SM Prime eyes bond sale, loans as REITS substitute

SM Prime Holdings Inc., the country's largest shopping mall operator and developer, is looking at raising $50 million to $100 million via either a bond sale or "full" borrowings if the final implementation of the Real Estate Investment Trust (REIT) Act fails to materialize this year. SM Prime chief financial officer Jeffrey Lim said Wednesday the proceeds of the offer, expected in the second half of 2010, would be used to refinance existing debt. "We will [take this route] if the REIT does not become a realty." Lim said SM Prime, which tapped CLSA and Macquarie as international advisers, may raise about $500 million by spinning off its mall assets through a REIT offer. SM Prime, along with other major property developers in the country, is waiting for the final tax rules on REITs from the Bureau of Internal Revenue. —JE, GMANews.TV