GT Capital gets highest credit rating for P10-B bonds
GT Capital Holdings Inc., the listed investment holding firm of banking tycoon George S.K. Ty, has secured the highest credit rating for its planned P10-billion bond issuance.
Philippine Rating Services Corp. (Philratings) said it assigned a PRS Aaa score on GT Capital’s proposed sale of seven- and 10-year bonds.
The P10-billion bonds to be sold “are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” Philratings said.
Philratings said the credit rating reflects the solid market position of GT Capital’s current businesses, its strong partnerships with recognized global players, good management team, ample funding to cover bond payments, sound capitalization and its diversified portfolio.
A credit rating is essential prior to the issuance of bonds. It gives the public a gauge whether the offering is a sound investment instrument.
In December, GT Capital said it is issuing up to P10 billion worth of fixed-rate bonds to support its capital expenditure program.
The conglomerate remains on a fastpaced growth trajectory on the back of the country’s strong economic growth, robust domestic consumer spending and steady flow of remittances from overseas Filipino workers.
“Over the years, the Ty family has successfully entered into long term joint ventures in various industries with globally-recognized corporate leaders,” Philratings said.
GT Capital is into banking (Metropolitan Bank Trust Co.), property (Federal Land Inc.), automotive (Toyota Motor Philippines Corp.), power production (Global Business Power Corp.) and pre-need (Philippine AXA Life Insurance, a joint venture with global insurance giant AXA Group).
Philratings said GT Capital has ample cash, derived from dividends from subsidiaries and associates.
“For the years 2014- 2023, cash dividends received from investee companies will be sufficient to fund loan repayments including the rated P10 billion bonds, dividend pay-outs, and acquisitions of property and equipment,” Philratings said.
In the nine months to September last year, the conglomerate reported a 107-percent surge in its consolidated net income to P5.3 billion from a year ago as consolidated revenues more than tripled to P16.7 billion from P5.4 billion the previous year.
Last week, GT Capital raised P14.3 billion through a share sale to institutional investors. Bulk or P9 billion of the proceeds were used to acquire an additional 30 percent stake in Toyota Motor from subsidiary Metrobank, bringing its share in the automotive firm to 51 percent.
Philratings said its issuer score is based on available information and projections at the time the rating review is ongoing.
“Philratings will continue to monitor developments in relation to GT Capital, and can adjust its credit rating for the bonds at any time should circumstances warrant a rating change,” it added.