Fitch upgrades Napocor credit rating

MANILA, Philippines - Fitch Ratings has upgraded the credit rating of National Power Corp. (Napocor), the state-owned power company.

 In a statement, Fitch said it has upgraded Napocor’s 2006 fixed-rate notes due 2016 to ‘BBB-’ from ‘BB+’. It also assigned a stable outlook on the debt.

“The rating on the notes is credit-linked to that of the Philippines as the notes are irrecoverably and unconditionally guaranteed by the Republic of Philippines,” Fitch said.

Furthermore, the global debt watcher said the rating action follows the upgrade of Philippines’ long-term foreign currency issuer default rating to ‘BBB-’ from ‘BB+’ with a stable outlook.

An investment grade rating reduces the government’s borrowing cost and puts the country back in the radar screen of foreign investors and fund managers.

The Philippine economy grew 6.6 percent in 2012, beating the government’s target of five to six percent.

In an interview yesterday, Bangko Sentral ng Pilipinas (BSP) Investor Relations Office executive director Claro Fernandez said the Fitch upgrade is a vote of confidence for the Philippines.