SMC’s P10-B bonds get top credit rating

MANILA, Philippines - San Miguel Corp.’s proposed P10 billion fixed-rate bond issuance was assigned a credit rating of PRS Aaa, with a stable outlook, by the Philippine Rating Services Corp.

Proceeds from the bond issue will be used to partially pay the company’s dollar-denominated obligations.

This is the second issuance under the company’s three-year shelf registration of up to P60 billion. The conglomerate previously issued P20 billion in fixed-rate retail bonds last March 1. This issue was likewise rated PRS Aaa, the highest rating assigned by PhilRatings.

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. PRS Aaa is the highest rating assigned by PhilRatings.

 A stable outlook is defined as: “The rating is likely to be maintained or to remain unchanged in the next 12 months.”

In assigning the rating, PhilRatings took into account SMC’s ample cash flow generation, improving debt position, adequate liquidity, solid market position and seasoned management team.

The conglomerate’s healthy cashflow is seen to strengthen further as the company’s energy and infrastructure projects are completed.

SMC has diversified businesses ranging from beverages, food, packaging, fuel and oil, energy and infrastructure.  Its subsidiaries either enjoy a dominant or strong and leading market position. These companies include: San Miguel Brewery,  Ginebra San Miguel, San Miguel Pure Foods Co.,  San Miguel Yamamura Packaging Corp.,  Petron Corp., SMC Global Power Holdings Corp. and San Miguel Holdings Corp. (SMHC).

“SMC continues to invest in businesses that have the potential to be leaders in their respective industries. SMC also seeks to diversify into industries that support and ride on the growth and development of the Philippine economy, hence its recent foray into fuel and oil, energy and infrastructure,” Philratings said.