LGU Guarantee keeps high credit score

LGU Guarantee Corp. (LGUGC), a private guarantor of local government unit debt and development financing, maintained its issuer rating of PRS Aa plus from credit watchdog Philippine Rating Services Corp.

“A company rated PRS Aa differs from the highest rated corporates only to a small degree, and has a strong capacity to meet its financial commitments relative to that of other Philippine corporates. A “plus” is included to further qualify the rating,” PhilRatings said.

An issuer rating is an opinion on the general and overall creditworthiness of the issuer, evaluating its ability to meet all its financial obligations within a period of one year.

In assigning the rating, PhilRatings considered the recognition of LGUGC’s pioneering developmental role by other institutions, its well-managed growth of expenses, and expectations of the firm’s tempered profitability, going forward.

Established in March 1998, LGUGC continues to play an important role in the development of the LGU bond market in the country. Its clientele for its guarantees has since expanded to include water district, electric cooperatives, medium and large enterprises, state universities and colleges, and renewable energy technology projects (RETPs), among others.

“LGUGC’s entry into other markets and its offer of additional services positively benefits from the company’s highly-experienced management team… PhilRatings believes management’s knowledge and experience will be helpful, as LGUGC strives to keep a balance between enhancing and further improving on its operations while addressing the evolving needs of its select markets,” the local credit watchdog said.