Recent financing activity provides limited evidence of a broader shift. In the 12 January 2026 USD 300 million perpetual issuance (ISIN XS3242497538), proceeds were primarily used for refinancing, with only limited residual allocation to renewable and storage projects, while excluding coal and LNG in the stated use of proceeds.[1] While this appears intended to signal transition alignment, the impact is limited as the issuance largely offsets an equivalent refinancing need. As a result, there is minimal incremental capital directed towards transition activities, particularly given capital fungibility and the absence of a clear linkage to long-term decarbonisation outcomes.
As a privately owned company, SMCGL lacks the governance channels available in public equity markets, leaving fixed income investors as the primary external stakeholders with the ability to influence strategy. Within this, USD perpetual securities, which account for approximately 29% of the capital structure, form a core part of the funding base. Although classified as equity, these instruments function as fixed obligations through recurring distributions, weakening coverage as refinancing costs rise.[2] This reinforces their importance in shaping both financial outcomes and investor engagement.
The AFII bondholder engagement toolkit provides a framework to support this, outlining practical tools through which creditors can engage issuers on climate and nature-related risks, including through timing, conditionality, and coordination.[3]
Within this framework, “choice of timing” is particularly relevant. Aligning engagement with primary market activity can maximise influence, as it coincides with the issuer’s need for funding. This combines legitimacy, urgency, and the potential for conditionality in capital provision, while influence typically declines once refinancing is secured.[3]
An opportunity arises from the 9 December 2026 call of SMCGL’s USD 683.5 million 5.45% perpetual bond (ISIN XS2346954873). If not redeemed, the coupon resets to approximately 11%, creating a strong economic incentive to refinance.[4] It therefore seems likely that SMCGL returns to offshore markets to refinance the USD 683.5 million instrument, creating a window for engagement in the near future.
Ahead of any refinancing, investors may therefore focus on the extent to which future financing reflects a credible, entity-level transition strategy rather than relying on transaction-specific exclusions.
• Transition pathway – What is the company’s defined plan to reduce coal dependence at the portfolio level, and how will this translate into measurable changes in capacity mix, capital allocation, and emissions over time?
• Financing alignment – How will future issuances be structured to reflect an entity-level transition strategy, rather than relying on transaction-specific exclusions?
• Credibility and disclosure – How will the company demonstrate that financing supports real emissions reduction, given capital fungibility, and what level of reporting and verification will be provided?
The period leading up to the December 2026 call therefore represents a window for engagement, where transition considerations can be raised while financing decisions remain open.
[1] Proceeds were used to refinance outstanding 5.70% securities (ISIN XS2098881654), with any residual allocated to early-stage solar, hydropower, and battery energy storage system (BESS) projects. The stated use of proceeds excludes coal-fired and LNG-related assets. “San Miguel Global Power Holdings Corp. - Offering Circular"”, SGX, 12 Jan 2026.
[2] “San Miguel Global Power: Liability pressure and coal concentration beneath stable earnings”, AFII, 9 Apr 2026.
[3] “Finding your voice: tools for better bondholder engagement on climate and nature risk”, AFII, 5 Dec 2025.
[4] Based on the prevailing 5-year U.S. Treasury yield plus its initial credit spread and step-up margin. With the reset spread at 715.5 bps, comprising the original 465.5 bps and a 250 bps step-up, and the 5-year U.S. Treasury currently around 3.87%, this implies an all-in reset coupon of approximately 11%.
