Conglomerate San Miguel Corp. obtained the highest credit rating of PRS Aaa from Philippine Rating Services Corp. on its planned P10 billion bond offering scheduled in October.
PhilRatings also maintained a rating of PRS Aaa on San Miguel’s outstanding fixed-rate bonds worth 50 billion.
Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet financial commitment on the obligation is extremely strong.
In assigning the rating, PhilRatings considered the conglomerate’s steady cash flow generation that is seen to further strengthen as revenues from finished energy and infrastructure projects start to trickle in.
PhilRatings cited the company’s adequate liquidity and financial flexibility, well-entrenched market leadership and solid track record of subsidiaries, backed by stable demand due to the growing domestic economy.
PhilRating said the group’s experienced management team also provided assurance that the conglomerate’s aggressive growth strategy would be soundly executed.
“PhilRatings shall continuously monitor developments relating to SMC and may change the ratings at any time, should circumstances warrant a change,” the rating agency said.
The P10-billion bond offering represents the fourth and final tranche of the company’s P60 billion three-year bond shelf registration program earlier approved by the Securities and Exchange Commission. The bonds maturing in 2024 will carry a fixed interest rate per annum.
San Miguel has tapped BDO Capital and Investments Corp., China Bank Capital Corp., PNB Capital and Investments Corp. and RCBC Capital Corp. as joint lead underwriters and book runners of the bond offering.
San Miguel plans to use net proceeds from the bond offering to fund the redemption of the outstanding preferred shares of the company maturing next month or refinancing or re-denomination of existing loan obligations.
“PhilRatings also notes the SMC group’s historical success in tapping the debt market, with previous issuances of peso-denominated bonds and notes seeing strong market reception,” the rating’s agency said
“SMC and a number of its significant subsidiaries are publicly listed. The substantial value that can be unlocked from such publicly listed subsidiaries, should SMC parent decide to do so, enhances the group’s flexibility,” it added.
San Miguel has diversified businesses ranging from beverages, food, packaging, fuel and oil, energy and infrastructure.