San Miguel's ₱49B Dual Preferred Share Milestone

San Miguel Corporation Pioneers Dual Preferred Share Offering in Philippines: A Capital Markets Landmark

San Miguel Corporation (SMC), the Philippines' food-to-infrastructure powerhouse, has achieved a historic milestone by raising a total of ₱48.86 billion through a dual preferred share offering—the first of its kind in Philippine corporate history. This landmark initiative combines a ₱18.86-billion preferred share exchange offer and a ₱30-billion public offering, signaling an evolution in the country’s capital markets and strengthening SMC’s long-term financial foundation.

A Pioneering Dual-Offer Structure

The ₱49-billion issuance consisted of two major components that ran simultaneously: a private Preferred Share Exchange Offer and a Public Offering of Preferred Shares. This dual structure allowed SMC to innovate capital raising while giving investors new flexibility and avenues for participation.

1. The Preferred Share Exchange Offer: A Private Sector First

The ₱18.86-billion exchange offer marked the first-ever by a private Philippine company. Holders of Series 2-J and 2-K preferred shares were given the opportunity to swap their holdings for the newly listed Series 2-P, 2-Q, and 2-R preferred shares on a one-for-one basis. This provided investors an early exit mechanism before official redemption dates, increasing liquidity and breaking from traditional fixed-term structures.

A total of 251.47 million shares were tendered, comprising 173.76 million Series 2-J and 77.71 million Series 2-K shares. The remaining 92.91 million Series 2-J and 106.19 million Series 2-K shares will be redeemed on October 29 and December 10, 2025, respectively. The exchange offer's success demonstrated investor acceptance of SMC’s modernized financing model.

2. The Public Offer of Preferred Shares: Fueling Growth

Alongside the exchange, SMC launched a ₱30-billion public offering of Series 2-S, 2-T, and 2-U preferred shares. The offer featured a ₱20-billion base amount and a ₱10-billion oversubscription option, both fully subscribed at ₱75 per share. Dividend rates ranged from 6.965% to 7.536% annually, making these new instruments attractive amid interest rate stabilization.

This issuance was approved by the Securities and Exchange Commission on October 10, 2025, under the conglomerate’s shelf registration program. The strong subscription results were viewed as a vote of confidence in SMC’s credit profile and strategic growth execution.

Utilization of Proceeds: Infrastructure and Refinancing

The ₱49-billion proceeds are earmarked primarily for two uses:

• Refinancing short-term loans – SMC plans to strengthen its liquidity by converting short-term borrowings into longer, more stable capital through preferred equity, reducing future refinancing risks.
• Funding major infrastructure projects – Proceeds will support flagship projects such as the ₱735.63-billion New Manila International Airport in Bulacan and the ₱170.6-billion Ninoy Aquino International Airport (NAIA) Upgrade initiative, both core to SMC’s national development agenda.

San Miguel as a Capital Market Innovator

This twin-offer highlights SMC’s transformation into a capital markets innovator. By combining an exchange offer with a public sale, the company introduced flexibility for existing shareholders and an opportunity for new investors to participate under attractive terms.

Beyond its traditional strengths in food, beverages, and energy, SMC continues to drive the Philippines’ infrastructure growth through projects such as the Skyway System and the Subic-Clark-Tarlac Expressway. This offering demonstrates that Filipino corporations can adopt sophisticated global financing tools while strengthening domestic investor participation.

Conclusion

San Miguel’s ₱49-billion preferred share initiative is not only a financial success but a structural milestone for the Philippine capital markets. The company’s innovative approach sets a new template for corporations seeking to balance funding flexibility, investor participation, and sustainable growth.