SMC bond issue gets top rating


    Philippine Rating Services Corp. (PhilRatings) has assigned its top rating of PRS Aaa to San Miguel Corp.’s planned P10-billion bond issue, giving it a “stable” outlook.

    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.

    A stable outlook, on the other hand, indicates that the rating is likely to be maintained or to remain unchanged in the next 12 months.

    PhilRatings said the issue rating reflects San Miguel’s “steady cash flow generation that is seen to further strengthen, as proceeds from finished energy and infrastructure projects come in.”

    It also factored in the firm’s manageable leverage position, as the progressive completion of capital-intensive projects lessens the need for debt financing going forward, as well as San Miguel’s adequate liquidity and financial flexibility.

    The rating also took into consideration San Miguel’s well-entrenched market leadership and solid track record of subsidiaries, backed by stable demand that is expected to receive a further boost from a growing domestic economy.

    PhilRatings likewise noted San Miguel’s experienced management team, providing a large degree of assurance that the San Miguel Group’s aggressive growth strategy will be soundly executed.

    San Miguel is planning to raise P10 billion, the last tranche of fixed-rate bond issue of its P60-billion three-year Debt Securities Program.

    Ferdinand Constantino, San Miguel chief finance officer, said “the proceeds of the bond offering will be used to pay the maturing obligations of the company.”

    Constantino said the fixed-rate bonds will have an indicative tenor of five years and will be offered to qualified investors.