SL Agritech Corporation (SLAC), the leading producer of hybrid rice seeds and premium rice in the Philippines, has been assigned a high issuer credit rating of PRS Aa (corp.), with a Stable Outlook by Philippine Rating Services Corporation (PhilRatings).
PhilRatings said the rating was given in relation to the company’s commercial paper (CP) issuance of up to P2.0 billion.
The proceeds will be used to pay the company’s short-term obligations, and to purchase rice and seed inventories from its contract growers.
An issuer credit rating is an opinion on the general and overall creditworthiness of the issuer, evaluating its ability to meet all its financial obligations within a time horizon of one year.
The focus is on financial strength and stability under normal and stressed conditions to be able to meet existing and prospective financial obligations.
A company rated PRS Aa (corp.) differs from the highest-rated corporates only to a small degree, and has a strong capacity to meet its financial commitments relative to that of other Philippine corporates.
In arriving at the rating, PhilRatings said it took into account SLAC’scompetitive market position locally, supported by proprietary technology and vertically integrated operations.
It also took into consideration SLAC’s potential growth given the company’s international business expansion; and SLAC’s sustained profitability, albeit declining coverage ratios.
PhilRatings said also factored-in the manageable impact of the COVID-19 pandemic, despite increasing economic uncertainty, as the company’s products are considered essential.
For the next two years, SLAC expects growth to continue, mainly supported by its local operations.(James A. Loyola)