Philratings: BDO unit’s credit-worthiness ‘strong’

BDO Leasing and Finance Inc., a unit of taipan Henry Sy Sr.’s  BDO Group, won a “strong” rating score from Philippine Rating Services Corp. (Philratings) that showed it was in a stable position to meet its obligations.

Philratings gave BDO Leasing an issuer credit rating of PRS Aa, which signaled its “strong capacity to meet its financial commitments relative to that of other Philippine corporates.”

It said BDO Leasing obtained this score due to its strong brand recognition and continued asset expansion supported by increasing leverage and expectations of compressed margins and returns amid sustained revenue growth. The company also benefited from the overall “favorable economic and industry outlook,” it said.

The BDO unit’s activities include renting and leasing of equipment and real properties. It also provides direct leases, real estate leases and sale-leaseback arrangements. It is also involved in borrowing and relending of funds as well as financing products such as amortized consumer and commercial loans, installment paper purchases, floor stock financing, receivables discounting and factoring.

According to Philratings, an issuer rating is an opinion on the general and overall credit-worthiness of the issuer, evaluating its ability to meet all its financial obligations within a time horizon of one year.

Philratings added BDO Leasing was recognized as one of the leading players in the commercial leasing industry, directly competing with other financing companies affiliated with top Philippine banks and other financial services firms.

Last year, BDO’s leasing and financing portfolio stood at P27.5 billion, up by 16.1 percent year-on-year. This further increased by 8.4 percent to P29.8 billion as of end-Sept. this year. Total assets stood at P37 billion also as of end-Sept.

Meanwhile, bills payable remains its primary source of funding, accounting for 81.5 percent of total liabilities as of end-2015. Bills payable stood at P23.9 billion, P11.4 billion of which was peso borrowings from local banks while P12.5 billion was in the form of short-term notes issued to individual and corporate investors.

As of Sept. this year, outstanding bills payable further went up to P25.9 billion, while total liabilities stood at P31.9 billion.

Philratings said liabilities to equity ratio, thus, showed an increasing trend. From 4.87 times as of end-2014, the ratio went up to 5.61 times as of end-2015, and further increased to 6.16 times as of end-Sept. 2016.

Gross revenues also reached P2.6 billion in 2015, up 14.6 percent from P2.3 billion in 2014. The company registered a net income of P555.6 million for the year, up 10.2 percent. —MIGUEL R. CAMUS