SMC power unit to raise P25 B from fixed rate bonds

Published October 9, 2017, 10:01 PM By James A. Loyola

https://business.mb.com.ph/2017/10/09/smc-power-unit-to-raise-p25-b-from-fixed-rate-bonds/

SMC Global Power Holdings Corporation (SMC Global Power), a unit of diversified conglomerate San Miguel Corporation, is planning to raise up to P25 billion from a planned issuance of fixed rate bonds.

Philippine Rating Services Corporation (PhilRatings) has assigned its highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, to SMC Global Power’s proposed P20 billion in Fixed Rate Bonds, with an oversubscription option of up to P5 billion.

PhilRatings has likewise maintained its Issue Credit Rating of PRS Aaa, with a Stable Outlook, for SMC Global Power’s outstanding P15 billion in Fixed Rate Bonds.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk and the obligor’s capacity to meet its financial commitment on the obligation is extremely strong. On the other hand, a Stable Outlook means “the rating is likely to be maintained or to remain unchanged in the next 12 months.”

In arriving at the rating, PhilRatings identified as key strengths SMC Global Power’s dominant market position, with a solid platform for expansion and its strong parent company support and synergies derived from the San Miguel Group.

Also taken into consideration is the firm’s long-term offtake contracts with customers, which provide stability in terms of revenues and cash flows. PhilRatings also considered outstanding legal issues that may have an impact on the company’s operations.

SMC Global Power has a combined capacity of 3,063 megawatts (MW) which represents about 14.7 percent of the power supply of the National Grid, 19.8 percent of the Luzon Grid, and 5.0 percent of the Mindanao Grid.