SMC to issue 266 million Series 2 Preferred Shares at ₱75.00 per share. 

Who is the issuer?

San Miguel Corporation (SMC) is one of the largest and most diversified conglomerates in the Philippines by revenue and total assets. SMC operates six key business groups (food and beverage, packaging, fuel and oil, energy, infrastructure, and cement), alongside investments in property development and leasing, car distributorship, banking, and insurance. Its common shares have been listed on the Philippine Stock Exchange since November 5, 1948. 

What are they offering?

SMC will issue 266,666,600 cumulative, non-voting, non-participating, non-convertible, redeemable, re-issuable, perpetual Series 2 Preferred Shares at ₱75.00 per share, with an Oversubscription Option of up to an additional 133,333,400 shares. The base offer size is approximately ₱20.0 billion, and up to ₱30.0 billion if the Oversubscription Option is exercised in full. The offering comprises three subseries: Series 2-V Preferred Shares (SMC2V), redeemable at the issuer’s option on the 3rd anniversary of the Issue Date; Series 2-W Preferred Shares (SMC2W), redeemable on the 5th anniversary; and Series 2-X Preferred Shares (SMC2X), redeemable on the 7th anniversary. All three subseries are expected to list on the PSE on July 31, 2026. The Offer Shares will be issued out of the Series 2 Preferred Shares held in treasury by the Company.

Read below to learn more about why SMC is doing this, what you need to know, and how to subscribe to this offering.

SMC Series 2 Preferred Shares (SMC2V, SMC2W & SMC2X)

Dividend Rate:

• Series 2-V: 8.0401%
• Series 2-W: 8.3570%
• Series 2-X: 8.6483%

Distribution Frequency: Quarterly 

Offer Price: ₱75.00 per share, minimum of 500 shares (₱37,500)

Offer Period: July 15 to July 23, 2026

DragonFi Subscription Window: July 15 to July 16, 2026

Expected Listing Date: July 31, 2026

What are Preferred Shares?

Preferred shares can be considered a hybrid security that combines some of the characteristics of both common equity and fixed-income securities. Like common equity, preferred shares represent an ownership stake in a company. However, unlike common equity, preferred shares typically have a fixed dividend rate which makes them similar to fixed-income securities such as bonds. 

What is in it for the company?

According to the prospectus, SMC will use the net proceeds to fund: (i) the full refinancing of existing short-term loans incurred to redeem its Series 2-I Preferred Shares in March 2026, (ii) the repayment of its Series C and Series J Bonds maturing in March 2027, and/or (iii) additional investments in its infrastructure business, including the Manila International Airport and other airport-related projects in Bulakan, Bulacan. Pending deployment, the Company intends to invest the net proceeds in short-term liquid investments such as government securities, bank deposits, and money market placements. Taken together, the offer allows SMC to term out near-term maturities while continuing to fund its infrastructure build-out.

What you need to know!

1. The preferred shares are cumulative

If the issuer is unable to pay its dividends on a designated payment date, you have the right to receive all outstanding and unpaid dividends on a future dividend payment date before any dividends can be paid to common shareholders.

2. The preferred shares are perpetual

The Series 2-V, Series 2-W, and Series 2-X Preferred Shares have no fixed maturity date or mandatory redemption date. Redemption is entirely at the discretion of the Board of Directors. The issuer will continue to pay regular dividends as long as the shares remain outstanding. Preferred shareholders have no right to require the issuer to redeem the shares.

3. Preferred shares are less liquid

These are generally less liquid than common stock, meaning they may be harder to sell in the market if you need to liquidate quickly. While the shares will be listed on the PSE, trading volume in preferred shares is typically lower than for common shares.

4. Evaluate the financial health of the company

You should carefully evaluate the company issuing the preferred shares and ensure that it has a stable and sustainable business. SMC is a highly diversified conglomerate with market-leading positions across food and beverage, fuel and oil, energy, and infrastructure, but it is also capital-intensive and carries significant long-term debt tied to its infrastructure projects. Consider whether the company is likely to sustain dividend payments through market cycles before investing.

5. The dividend rate and tenor differ across the three subseries

The Series 2-V Preferred Shares carry the shortest optional redemption window (3rd anniversary of the Issue Date), followed by the Series 2-W Preferred Shares (5th anniversary) and the Series 2-X Preferred Shares (7th anniversary). Each subseries also has a separate Step-Up Date: 5.5 years for Series 2-V, 7 years for Series 2-W, and 10 years for Series 2-X. If the shares are not redeemed by the relevant Step-Up Date, the dividend rate resets to the higher of the Initial Dividend Rate or the applicable benchmark plus 3.00%: the 10-year BVAL for Series 2-V, the interpolated 15-year BVAL for Series 2-W, and the 20-year BVAL for Series 2-X. This step-up feature is designed to incentivize the issuer to redeem on schedule.

6. Dividend payment dates

Dividends are paid quarterly. The dividend periods run September 21 to December 20, December 21 to March 20, March 21 to June 20, and June 21 to September 20, aligning with SMC’s outstanding Series 2 Preferred Shares. The Dividend Payment Date may fall on any day from the last day of a dividend period up to seven trading days after it, as set by the Board of Directors at the time of declaration.

7. Minimum subscription

The minimum subscription is 500 shares (₱37,500), and thereafter in multiples of 10 shares (₱750).

How to subscribe?

Clients can choose to subscribe to the offering by checking out the On-going and Upcoming offering under the Calendar page here.