SMC bonds keep highest credit rating

MANILA, Philippines — The nearly P140-billion outstanding bonds of diversified conglomerate San Miguel Corp. (SMC) remain highly rated, the country’s leading credit rating agency said.

The Philippine Rating Services Corp. (PhilRatings) has kept its issue credit rating of PRS Aaa, with a stable outlook, to SMC’s outstanding bonds after taking into account the company’s diversified portfolio that includes market-leading businesses, as well as its solid leadership with a well-defined succession program.

Other factors considered include SMC’s sustained profitability even though higher charges and non-recurring transactions affected bottom line, as well as ample liquidity supported by stable cash flow generation.

“Continued core business expansion and enhancement projects will be supportive of top line growth, moving forward. Cash flows are likewise expected to be healthy, backed by sustained profitability,” PhilRatings said.

“Given the foregoing, SMC is seen to be in a good position to service its debt obligations,” it said.

PRS Aaa is the highest rating assigned by PhilRatings, with obligations rated as such are considered of the highest quality with minimal credit risk

A stable outlook, on the other hand, indicates that the rating is likely to be maintained or to remain unchanged in the next 12 months.

SMC has diversified portfolio of businesses spanning food and beverage, packaging, energy, fuel and oil, infrastructure, cement, property and banking services.

PhilRatings said SMC’s key businesses have established solid market leadership over the years, supported by strong brand equity and proven track record.

PhilRatings cited the appointment of John Paul Ang, the eldest son of tycoon Ramon Ang, as president and chief operating officer of the group in 2024 as part of SMC’s well-defined succession program.

“His steady rise to senior leadership positions within the group over the years reflects the group’s strategy on business continuity, supported by a clear succession plan,” it said.