JG Summit keeps top rating for bond issue

Published October 8, 2020, 6:00 AM

by James A. Loyola

JG Summit Holdings, Inc. (JGSHI) has maintained the top issue credit rating of PRS Aaa, with a Stable Outlook, for its outstanding P5.5 billion Fixed-Rate Bonds as it is seen to weather the challenges posed by the COVID-19 pandemic.

In giving the bonds its triple-A rating, Philippine Rating Services Corporation (PhilRatings) said that, “Moving forward, the Group is anticipated to benefit as the economy gradually opens up and recovers.” 

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 is assigned when a rating is likely to be maintained or to remain unchanged in the next 12 months.

The assigned issue rating considered JG Summit’s strong liquidity, sound capital structure, and its strong and well-experienced shareholders and management.

It also factored in the expectations that the JG Summit Group’s diversified portfolio of core businesses with solid market position, a continued focus on consumer needs, and digital initiatives will allow the Group to weather and adapt to the disruptions due to the ongoing community quarantine and COVID-19


“The company’s strong and well-experienced management will be an advantage, amid an environment which faces significant challenges in relation to the ongoing community quarantine and COVID-19 pandemic,” PhilRatings noted. 

It cited that, “During the Asian Financial Crisis in 1997, JGSHI launched CEB, which was the leading Philippine domestic carrier before the current pandemic.”

In 1993, JSGHI also completed its initial public offering (IPO), and issued its ten-year US$300 million convertible bond. This bond, along with the proceeds of the IPO, funded JGSHI’s growth amidst the turbulent nineties and the Asian Financial Crisis (AFC). “During the Global Financial Crisis in 2008, the Group incurred a net loss of P586 million. JGSHI, however, was able to quickly recover with a net income of P11.77 billion and P20.91 billion in 2009 and 2010, respectively,” the ratings agency noted.