Philippines: San Miguel’s bonds receive highest possible rating from the Philippine Rating Services

The Philippine Rating Services gave the highest possible rating to the proposed P20-billion bond of San Miguel Brewery Inc., GMANews.TV reported on February, 5.

“Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligations is extremely strong. PRS Aaa is the highest rating assigned by PhilRatings.," PhilRatings said.

SMBI’s proposed bond issue will be paid in three tranches: payable in three, five and 10 years.

Proceeds from SMBI’s bond issue will be used to the purchase P38.8-billion worth of land and brands from parent San Miguel Corp.

PhilRatings said the rating also reflects SMBI’s market leader position, experienced management and production team, as well as continued positive although moderated growth for the beer industry amidst economic prospects and conditions.

It also takes into account the sustainable improvement in SMBI’s earnings, its strong cash flow generation and managed debt utilization, and the company’s demonstrated financial flexibility.

SMBI’s brands continue to strengthen its leadership in the Philippine beer industry, increasing their market share from 91 percent in 2000 to 95 percent in 2007.

The company was spun-off from a division to a wholly-owned subsidiary of San Miguel, with only the division’s net assets (excluding land, brands and income and other taxes payable) transferred to SMBI pursuant to its listing with the Philippine Stock Exchange and public offering of the shares of SMBI.

SMBI was incorporated on July 26, 2007, and the domestic beer business was spun-off from San Miguel effective October 1, 2007.

06 February, 2009