Globe Telecom, Inc. has retained the top Issue Credit Rating of PRS Aaa, with a Stable Outlook, for its total outstanding Fixed-rate Bonds of P7.0 billion.
Philippine Rating Services Corporation (PhilRatings) 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.
The rating and Outlook were assigned given Globe’s strong cash flow generation; more than adequate liquidity position; solid market position with strong brand recognition resulting in improved market share; and proactive stance in terms of product offerings leading to sustained growth of the company’s subscriber base.
PhilRatings noted that, “Globe benefits from its connections with Ayala Corporation in terms of local business experience, management expertise, a strong brand name and established relationship with regulators.”
AC’s outstanding bonds totaling P40 billion are also rated PRS Aaa, with a Stable Outlook, by PhilRatings.
In the first quarter of 2020, the ongoing COVID-19 pandemic affected the company’s operations but PhilRatings said “The slowdown in the immediate term was expected. Foreseen challenges and leverage levels remained manageable and liquidity remained more than adequate. Globe is seen to be in a good position to settle its P4.0 billion fixed rate bonds maturing in July 2020.”
The enhanced community quarantine (ECQ) implemented in Luzon and other high-risk areas from mid-March until end-May limited the movements of the public which affected the usage of mobile data.
There was a significant shift to home broadband services as companies implemented a work-from-home set up for employees, schools engaged in online classes and lectures for students, and people kept in touch via video conferencing.
There was likewise an increased consumption of online entertainment, e-commerce services and leisure internet browsing at home.
In addition, nationwide restrictions and social distancing measures limited on-site marketing and had cut new acquisitions and additional clients. Nevertheless, telecommunication facilities and services have been identified as “essential,” which will result in relatively stable operations compared to other industries identified as “non-essential” during this time of the COVID-19 pandemic, PhilRatings said.