GT Capital to issue P12-B corporate bonds

MANILA, Philippines - Taipan George S.K. Ty’s investment firm GT Capital Holdings Inc. is planning to raise as much as P12 billion through corporate bonds, which secured the top credit score from a local debt rater.

Philippine Rating Services Corp. (PhilRatings) said the proposed P12 billion debt papers of GT Capital were rated PRS Aaa. The credit score for GT Capital’s outstanding P10 billion bonds was likewise maintained at PRS Aaa.

“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,” PhilRatings said.

The credit rater said it took note of GT Capital’s “solid financial profile backed by strong liquidity and sound capital structure; strong market position of businesses in its investment portfolio; and expectations that its diversified portfolio will benefit from the continued growth of the domestic economy.”

GT Capital allotted P50 billion for its capital expenditures this year, mostly to fund property and power projects. The capital spending will raise P10 billion from bonds, with an oversubscription option of up to P2 billion in case of strong demand.

GT Capital is into banking (Metropolitan Bank & Trust Co.), property (Federal Land Inc.), power generation (Global Business Power Corp.), automotive assembly and importation

(Toyota Motor Philippines), life insurance (Philippine AXA Life Insurance), non-life insurance (Charter Ping An Corp.) and automotive distribution (Toyota Manila Bay Corp. and Toyota Cubao Inc.).

“On a parent company basis, projected operating cash would be sufficient to fund investment and financing activities, including payment of the outstanding P10 billion and proposed P12 billion bonds upon maturity,” Philratings said.

In particular, GT Capital’s liquidity remains robust, with strong cash generation from operations and equity-raising activities in 2013, PhilRatings said. As of end-March, the investment firm had cash and cash equivalents of P27.7 billion, enough to cover its short-term debt of P8.3 billion.

“Cash dividends received from investee companies are significant source of liquidity for GT Capital,” the credit rater said, adding that external funding is also available through credit facilities from various domestic banks.

For the operating units, PhilRatings said Metrobank, the country’s second largest bank based on assets of P1.1 trillion, corners 12.6 percent of assets, 13 percent of deposits and 13.1 percent of loans for the universal and commercial banking sector.

Federal Land, which has a diversified portfolio of current and future projects, is able to reach a wider network of potential customers through its parent firm, PhilRatings said.

The power generation unit of GT Capital is one of the leading independent power producers in the Visayas region and in Mindoro with a combined gross dependable capacity of 622 megawatts (MW) while Toyota Philippines remained the leading automotive brand in the Philippines with a market share of 36.3 percent in 2013, PhilRatings noted.

Moving forward, GT Capital plans to further strengthen its leadership position across its existing businesses; seek profitable growth opportunities in other key domestic industries via its proven partnership model; and consolidate its ownership in several companies, the credit rater said.