SMC Global to issue bonds

SMC Global Power Holdings Corporation, a subsidiary of diversified conglomerate San Miguel Corporation, is raising R15 billion from a planned issuance of Fixed Rate Bonds.

This represents the last tranche of the SMC Global’s three-year shelf registration of up to R35 billion. The company has already issued R20 billion under its shelf registration.

According to the firm, the proceeds of the proposed issuance will be used mainly for debt refinancing. Philippine Rating Services Corporation (PhilRatings) has assigned its highest Issue Credit Rating of PRS Aaa with a Stable Outlook to the proposed R15 billion bonds.

The ratings agency has likewise maintained its Issue Credit Rating of PRS Aaa, with a Stable Outlook, for the first tranche of the shelf registration amounting to R20 billion (issued in December 2017) and its other outstanding R15 billion Fixed Rate Bonds (issued in July 2016).

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.

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 noted SMC Global Power’s leading market position, with a solid platform for expansion; as well as the strong support from its parent company, SMC, and SMC affiliates.

PhilRatings also cited the stability of SMC Global’s earnings and substantial cash flows, supported by the long-term offtake contracts and its ideal position to capitalize on the growing demand for electricity in the Philippines, supported by the expansion of the domestic economy.

PhilRatings also considered outstanding legal issues that may have an impact on the company’s operations.