D&L bonds obtain highest credit rating
LISTED D&L Industries Inc. received the highest issue credit rating of “PRS Aaa with Stable Outlook” from Philippine Rating Services Corp. for its maiden bond offering worth up to P5 billion.
Obligations rated by PhilRatings as PRS Aaa are considered of highest quality with minimal credit risk and the obligor’s capacity to meet its financial commitment on the obligation is extremely strong.
A stable outlook, meanwhile, means the rating is likely to be maintained or remain unchanged in the next 12 months.
PhilRatings said the rating and outlook were assigned based on the following considerations, “strong market position in the industries that it is engaged in, diversification of products offered and markets served, bulk of D&L’s revenues are from innovation-driven, high-margin specialty products, protecting the company from keen competition and ensuring continued demand for its products, revenues have been fluctuating historically although net income was generally on an uptrend prior to the pandemic while margins were maintained within a narrow band and relatively conservative debt management and adequate cash flow generation.”
“With its track record and experience, the company enjoys long standing customer relationships with the country’s leading consumer companies. D&L continues to leverage on these established ties to further enhance and solidify its market position. The company has likewise been able to sustain and grow its operations amidst the ups and downs experienced by the Philippine economy,” PhilRatings continued in a statement.
D&L filed for its P5-billion fixed-rate bonds offering to the Securities and Exchange Commission last month.
The company is set to offer P3billion peso-dominated fixed-rate bonds, with an oversubscription option of up to P2 billion, consisting of 3-year bonds due 2024 and or 5-year bonds due 2026.
Net proceeds from the offer are intended to partially fund D&L’s capital expenditures, which includes the completion of its Batangas plant expansion, repayment of bridge loans, and general corporate purposes.
The bonds will be issued at face value and will be listed and traded through the Philippine Dealing and Exchange Corp.
China Bank Capital Corp. will serve as the sole issue manager, lead underwriter and sole bookrunner for the transaction.
D&L’s net income climbed by 35 percent to P695 million in the first quarter from P515 million in the same period last year as it recorded improvement across all its segments.
Shares of D&L declined by 38 centavos or 4.56 percent to end at P7.96 apiece on Friday.