Converge ICT Solutions Inc. has secured the highest credit rating from Philippine Ratings Services Corp. (PhilRatings) for its planned maiden bond issuance worth P5 billion.
Converge’s maiden bond offering has been granted a “PRS Aaa rating with stable outlook” due to the internet provider’s formidable position in the fixed broadband market following its spectacular growth in recent years and its strong cash flow that provided it flexibility in its network rollout, the local credit rating agency said.
“Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” said PhilRatings.
A stable outlook means the rating is likely to remain unchanged for the next 12 months.
In a statement, Dennis Anthony Uy, Converge chief executive officer, said the funds to be generated from the proposed bond issue would be used to support the capital expenditures of the company amid its massive expansion.
Converge aims to cover 55 percent of Philippine households by 2023 as it already connected Visayas and Mindanao to its pure fiber national backbone earlier this year.
“We’re pleased that our prudent fiscal management, coupled with a strong operational performance, throughout the year has garnered us the highest credit grade from PhilRatings,” Uy said.
“Gaining this seal of approval from PhilRatings signals that our debt papers pose minimal credit risk. Our strong liquidity and market position should give confidence to potential investors,” said Maria Grace Uy, Converge president.
The credit rating agency took stock of the company’s performance and external developments in the ICT industry.
According to PhilRatings, while Converge is relatively small in terms of asset size, it has acquired a strong footing in the fixed broadband market. Based on the total fixed wired broadband subscribers of the three telecom companies, Converge cornered 30 percent of the total as of end-September 2021.
Last week, Converge announced its intent to issue Philippine-peso denominated fixed-rate bonds in the Philippine Dealing and Exchange Corp., an initial tranche of P 5 billion, with an oversubscription option of another P5 billion. The local bonds are expected to have a tenor of five years. – Myla Iglesias
