PCILF, a publicly-listed finance company without a quasi-banking license, will file with the Securities and Exchange Commission this week its registration statement covering the sale of its STCPs.
The Philippine Rating Services Corp. (Philratings), a member of Standard & Poor’s has given PCILF a rating of PRS 1 minus on its capability to pay both principal and interest on its proposed P250 million STCPs. The rating indicates PCILF’s very strong capability for the payment of debts.
In giving the rating, Philratings took into consideration PCILF’s improved operating results and margins, very strong liquidity position, large absolute size of capital and conservative leverage position, containment in level of its problem assets, and support from Equitable PCIBank, the third largest bank in the country.
PCILF is one of the top three significant revenue and earnings contributor to the Equitable-PCIBank Group. During the first six months of the year, profits of the company grew to over P420 million, boosted by higher operating revenues coupled with the significant hike in operating income and lower tax provision. First half 2002 operating revenues improved from a year ago due to higher business volume.
Aside from substantially reduced financing charges due to lower borrowings, PCILF was successful with its productivity enhancement program, leading to the downtrend in operating expenses, starting 2000.
Philratings said PCILF’s expected receivables collections both in the short and long-term more than adequately cover its payables, including the proposed STCPs. "Alternate liquidity in the form of bank credit facilities is also available to support the company’s operating cash requirements," Philratings said.
As of end-June 2002, PCILF’s capital base stood at P2.9 billion, making it the largest among the country’s domestic finance companies. Its debt-to-equity ratio during the same period is very conservative at 0:30:1, putting PCILF in a better position to endure prolonged market weakness and asset quality difficulties relative to other local finance companies.
The finance firm’s loan portfolio, on the other hand, has been maintained at about P3 billion since 1999 up to the first half of this year. – Zinnia dela Peña