Debt paper of BDO unit gets ‘above average’ grade

MANILA, Philippines—The short-term peso debt of BDO Leasing & Finance, a subsidiary of BDO Unibank Inc., has been rated “above average” by the country’s leading credit agency.

In a statement, Philippine Ratings Services Corp. (PhilRatings) said it assigned a PRS 2 rating for the short-term commercial paper worth P15 billion issued by BDO Leasing & Finance.

PhilRatings said the PRS 2 rating, which is a notch below the top grade of PRS 1, reflects the “above-average capability for payment of commercial paper issue on both interest and principal.”

“This is normally evidenced by many characteristics of a PRS 1 rating, but to a lesser degree. Earnings trends and coverage ratios, while sound, will be subject to variations,” it added.

In arriving at the rating, PhilRatings said it considered BDO Leasing’s solid market position and business synergy with its parent company, BDO Unibank Inc. (BDO). It also took note of the firm’s expanding loan portfolio and improved profitability, stable asset quality and composition, as well as adequate financial flexibility and sufficient capitalization.

PhilRatings, however, also sees the need for BDO Leasing to sustain profitability moving forward to reflect a longer track record in terms of improved operating results.

BDO Leasing is a significant player in the Philippine financing industry. It continues to benefit from synergies, name recognition and marketing referrals provided by the BDO Group.

The BDO Group has an extensive distribution network, with more than 780 operating branches and over 2,000 ATMs nationwide. As of end-June, BDO was also the country’s largest bank in terms of resources, deposits and assets under management.

BDO Leasing & Finance posted a net income of P310 million in the first nine months of the year, up by 4 percent from the P297 million reported in the same period last year.

This was a result of improvements in the firm’s top line and controlled expenses. Gross revenues for January to September amounted to P1.4 billion—9 percent higher year-on-year. Total operating expenses also grew by 9 percent, from P904 million to P988 million.

BDO unit debt issue gets PRS 2- rating | Inquirer Business