ABS-CBN Corp. maintained the top rating for its P6-billion bond issue as credit watcher Philippine Rating Services Corp. (Philratings) cited minimal risk that the media giant would default on its obligations.
Philratings said it had given ABS-CBN’s debt issuance the score of PRS Aaa. This means ABS-CBN’s capacity to meet its financial commitment on the obligation “is extremely strong.” The bond issuance is due on Feb. 10, 2021. A stable outlook was likewise assigned, Philratings said.
Philratings cited ABS-CBN’s experience in the TV business, profitability, the track record of its management, “hit” TV shows and its talent pool, as well as its strong balance sheet.
ABS-CBN subsidiaries and brands include SKYCable, The Filipino Channel, Star Cinema, Star Records, Kidzania, ABS-CBN TVplus, and ABS-CBNmobile—its mobile telecommunications unit—which operates using Globe Telecom’s telecommunication infrastructure.
In its statement, Philratings also noted ABS-CBN’s strong television ratings as well as popular movies and TV shows, which remained its core business.
“As attested by the popularity of its programs, management is well-attuned to what appeals to the mass market,” Philratings said.
“The diversity and synergy of the company’s platforms also give its talents more avenues for exposure to the market, giving them better chances of increasing their popularity,” it added.
ABS-CBN Corp. saw a big jump in profit in 2016, which was an election year. The company, which still derives 57 percent of revenue from television ads, said net income last year hit P3.5 billion, a year-on-year gain of 39 percent. Full year revenues hit P41.6 billion, up 9 percent.
For 2016, the company has set aside P8.8 billion in capital expenditures, while spending in 2017 would hit about P8 billion.
In line with this, ABS-CBN is building two sound stages in Bulacan.