Diversified conglomerate San Miguel Corporation’s planned offering of up to P30 billion in fixed-rate peso-denominated bonds has been given the highest issue credit rating of PRS Aaa by Philippine Rating Services Corporation (PhilRatings).
SMC is planning a bond issuance of P20 billion, with an Oversubscription Option of up to P10 billion. This will be the first issuance of SMC in relation to its three-year Shelf Registration of Bonds of up to P50 billion from 2021 to 2024.
PhilRatings said it has also maintained its issue credit rating of PRS Aaa, with a Stable Outlook, for the company’s P60 billion in outstanding rated bonds.
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 bonds will be offered within a period of three years at an issue price of 100 percent face value. The six-year bonds are slated for offering to retail and institutional investors in June this year.
“The entire proceeds for this Offer will be used for redenominating the existing dollar denominated obligations of the Company and expenses of the shelf registration and offering of the Offer Bonds,” SMC said.
PhilRatings said the assigned ratings reflect SMC’s well-entrenched market leadership and the solid track record of subsidiaries as well as its ample liquidity, supported by stable cash flow generation.
It also noted SMC’ manageable leverage position, as the progressive completion of capital-intensive projects reduces the need for debt financing, going forward; and its experienced management team, providing a large degree of assurance on the company’s bullish growth strategy and resilience.
SMC’sconsolidated net income in the second half of 2020 amounted to P25.9 billion, reversing the net loss of P3.99 billion in the first semester that was largely due to the economy’s contraction and quarantine restrictions.
The improvement of the performance in the second half resulted mainly from the sustained recovery of all major businesses, combined with effective cost-saving initiatives implemented throughout the SMC Group.
Despite the recovery in the second half of 2020, consolidated net income in 2020 still dropped by 55 percent to P21.9 billion.