SM Beer gets top credit rating for P20-B bonds

MANILA, Philippines -San Miguel Brewery Inc.’s proposed issuance of up to P20 billion worth of five and 10-year bonds was assigned the top PRS Aaa rating by the Philippine Rating Services Corp.

 “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,” PhilRatings said.

SMB said it intends to use proceeds from the bond issue to refinance Series A of its outstanding P38.8 billion bond issue worth P13.59 billion which will mature on April 3, 2012, as well as a $300-million term facility.

In issuing the rating, PhilRatings took into consideration SMB’s dominant market position domestically, experienced management and production team, with technical support from shareholder Kirin Holdings, high cash from operations and profitability, sustained financial flexibility and adequate capitalization, and enhanced financial position in the medium term.

PhilRatings said the refinancing plan would allow SMB, which produces leading brands San Miguel Pale Pilsen, Red Horse Beer and San Mig Light, to take advantage of current favorable market rates and extend maturities.

SMB is 51 percent owned by San Miguel Corp. and 48.38 percent by Japan’s Kirin Holdings Co. Ltd.

Kirin has been a leading global food and beverage manufacturer since 1907 and its international exposure and experience further enhance SMB’s competitive position.

SMB is currently looking at available alternatives to determine the optimal way by which to meet the Philippine Stock Exchange’s minimum public float requirement of 10 percent.