By Jenniffer B. Austria

The Securities and Exchange Commission approved the P38.8-billion bond offering of San Miguel Brewery Inc., the flagship beer unit of food and beverage giant San Miguel Corp.

San Miguel Brewery said in a filing with the SEC that it would offer P38.3 billion in bonds and allot another P500 million to cover oversubscription.

It said it planned to pay bond holders in three, five and 10-year terms.

San Miguel Brewery plans to hold an auction and set pricing of the bonds by the end of the week. The P38.8-billion float is the biggest corporate issue in the domestic market.

Debt-free San Miguel Brewery will use the proceeds from the offering to pay for tangible and intangible assets that the company will acquire from parent company San Miguel.

Eleven financial institutions will handle the bond offering. These are Hong Kong and Shanghai Banking Corp., Development Bank of the Philippines, Land Bank of the Philippines, BDO Capital and Investment Corp., BPI Capital, China Banking Corp., Standard Chartered Bank, Rizal Commercial Banking Corp., Philippine Commercial Capital Inc., ING Bank and First Metro Investment Corp.

Philippine Ratings Services Corp. earlier assigned a rating of PRSAaa on the San Miguel Brewery bond issue. PRS AA is the highest rating assigned by PhilRatings.

?PhilRatings will continue to monitor developments [San Miguel Brewery?s appetite for and availment of additional debt during the projected period] regarding San Miguel Brewery, taking into account their impact on San Miguel Brewery?s ability to service interest and principal payments on the bonds issue,? PhilRatings said.

San Miguel Brewery earlier reported year audited net sales revenues of P48.8 billion in 2008, up 11 percent from P44.1 billion in 2007, due to higher volume.

Net income grew 25 percent to P10.04 billion from a year-ago level of P8.02 billion on cost control and the implementation of volume-generating programs.

Kirin Brewery of Japan earlier agreed to acquire a 43.35 percent stake in San Miguel Brewery.

The sale will reduce San Miguel?s shareholding in the local beer unit to 50.75 percent from about 94 percent.

Share price of San Miguel Brewery yesterday closed unchanged at P8.60 per share. San Miguel A shares, reserved only for local investors, ended lower at P42 from Wednesday?s close of P43, while B shares, which are open to both local and foreign investors, edged higher by P0.50 to P43 from P42.50.