PhilRatings closely monitors Berkley Plans

The Philippine Rating Services Corp. (PhilRatings) said that it was closely monitoring recent develoments regarding Berkley International Plans Inc. (Berkley Plans), after it was recently acquired in a management buy-out for P1.25 billion by Danvil Holdings (Danvil).

Danvil is the holding company of Daniel Villanueva, former executive vice president and chief financial officer of Berkley International Philippines Inc. (BIP).

BIP was previously owned by Berkley Internationjal LLC which in turn is wholly owned by W.R. Berkley Corp., which is listed at the New York Stock Exchange. Berkley Plans is a wholly-owned subsidiary of BIP.

Danvil said it will renamed BIP and reorganize to reflect its new ownership structure, while embarking on a geographical and product expansion within the year. Danvil announced that the new company will come up with a mutual fund product that will be sold either by its pre-need or insurance unit.

PhilRatings has started to closely monitor these developments, particularly with regard to their impact on Berkley Plans’ credit profile and subsequently its issuer rating.

Berkley Plans currency has an issuer rating of PRS Aa minus. A company rated PRS Aa "differs from the highest rated corporation by only a small degree, and has a strong capacity to meet its financial commitments relative to other Philippine corporates."

The ratings were revised upwards in April 2006 on account of the strong performance of Berkley Plans trust fund investments, and the company’s significant sales and earnings growth in 2005 amidst a backdrop of negative industry performance and public perception.

In 2005, Berkley Plans has assets of P3.5 billion and equity P455 million. Total revenues were P1.4 billion, while net income was P421 million. The company applied for a new issuer credit rating.