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Ayala-led Globe Telecom Inc. received the highest credit rating from Philippine Rating Services Corp. (PhilRatings) for its proposed P10 billion fixed-rate bond issuance.

PhilRatings issued PRS Aaa to the proposed bond issuance of Globe affirming that the debt instrument to be issued by the telecom giant are of the highest quality with minimal credit risk.

The rating also states that Globe’s capacity to meet its financial commitment on the obligations is extremely strong.

Of the total amount, Globe is planning to launch an initial tranche of P7 billion after which an additional P3 billion tranche would follow depending on market conditions and other factors.

PhilRatings issued its rating to cover both tranches and a total aggregate principal amount of up to P10 billion.

The rating for Globe’s existing P10 billion fixedrate bonds due in 2017 and 2019 was also maintained at PRS Aaa.

PhilRatings’ ratings are based on available information and projections at the time that the rating review was performed. PhilRatings continuously monitor developments relating to Globe and may change the rating at any time should circumstances warrant a change.

The rating primarily considered Globe’s strong competitive position and brand recognition, ample liquidity and multiple layers of financial flexibility, prudent leverage position and adequate capital structure, strong shareholder support, proactive management team and expectations of profitability improvement, going forward.

PhilRatings believes that Globe’s profitability is projected to pick up again driven by the growth in both mobile and broadband services and the benefits to be realized from the completion of its network modernization and information technology ( IT) transformation programs.

“PhilRatings will closely monitor the completion of Globe’s network modernization and IT transformation programs, inasmuch as these ongoing major projects will have a significant impact on Globe’s profitability over the long-term,” the rating agency said.

The net income of Globe plunged 75 percent to about P700 million in the first quarter of this year from P2.7 billion last year after falling 30 percent to P6.9 billion last year from P9.8 billion.

The number of subscribers of Globe jumped 16.8 percent to 35.1 million as of end-March this year from 30.04 million in end 2011. The Ayala-led was able to also improve its share of industry- wide cellular subscriber base to 32.9 percent from 32 percent.

PhilRatings added that Globe’s competitive position is expected to strengthen, going forward, given the company’s continuing focus and drive in relation to its revenue-generating products and services; benefits from the ongoing network modernization and IT transformation program; tie-ups and business synergies with major communications-related institutions; and product/service and geographic diversification through various alliances forged with subsidiaries, among others.

Globe has continued to benefit from the scale and track record of its principal shareholders, Ayala Corporation (Ayala) and Singapore Telecom International PTE Ltd. (SingTel).

PhilRatings said it would continue to monitor the compliance of Globe on the standards set by the National Telecommunications Commission ( NTC).

“Quality of service, as indicated by over-all market feedback from customers, as well as compliance with service performance standards set by the NTC shall likewise be looked into,” it added.