SMB retains top rating for bond issue

MANILA, Philippines - San Miguel Brewery Inc. (SMB) retained its existing PRS Aaa issue rating – the highest rating assigned by the Philippine Rating Services Corp. – for its outstanding P38.8 billion bond issue.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.

Series A of the bonds (amounting to P13.59 billion) will mature on April 3, 2012 while Series B (amounting to P22.40 billion) is due in 2014 while Series C (amounting to P2.81 billion) will mature in 2019.

In maintaining the rating, PhilRatings took into consideration SMB’s strong market position domestically; experienced management and production team, with technical support from Kirin Holdings; high cash from operations and cash reserves relative to current debt; sustained financial flexibility and adequate capitalization.

SMB is a solid leader in the Philippine beer industry, with a reported market share of about 96 percent in 2010.

PhilRatings believes that the company’s market dominance will continue to be supported by its strong and popular brand portfolio and extensive and efficient distribution system. The beer market is expected to continue to grow in the low single-digit levels in 2011-2012 given robust consumer spending.

As of June 30, 2011, SMB was 51 percent owned by San Miguel Corp. and 48.4 percent-owned by Kirin Holdings Co. Ltd.