SMC power unit to offer P20-B retail bonds

SMC Global Power, one of the country’s largest power companies, plans to raise as much as P20 billion from a domestic offering of retail bonds.

The bonds planned for issuance by the power unit of San Miguel Corp. has obtained a triple-A credit rating or “PRS Aaa” with a “stable” outlook from local credit watchdog Philippine Rating Services Corp. (PhilRatings).

PRS Aaa is the highest credit rating on PhilRatings’ long-term issue credit rating scale. Obligations rated PRS Aaa are deemed of the “highest quality with minimal credit risk.” The obligor’s capacity to meet its financial commitment on the obligation is considered “extremely strong.”

A “stable” outlook suggests that the rating is likely to be maintained or to remain unchanged in the next 12 months.

In a statement, PhilRatings said the proposed offering of P20 billion in fixed rate bonds would have an oversubscription option of up to P5 billion.

In giving its highest credit rating to SMC Global Power, PhilRatings cited the power company’s dominant market position, with a solid platform for expansion, strong parent company support and synergies derived from the San Miguel Group and long-term offtake contracts with customers which are seen to provide stability in terms of revenues and cash flows.

PhilRatings also considered outstanding legal issues that might have an impact on the company’s operations.

SMC Global Power has a diversified portfolio of power assets consisting of coal, natural gas and hydro with a combined capacity of 3,063 megawatts, representing about 14.7 percent of the power supply of the National Grid, 19.8 percent of the Luzon Grid and 5 percent of the Mindanao Grid.