S&P raises Manila Electric to BBB-/axA-

S&P said it raised the long-term corporate credit rating on Manila Electric Co. to BBB- from BB+.

The outlook is stable.

At the same time, the agency upgraded the Asean regional scale rating to axA- from axBBB+.

S&P said it upgraded Manila Electric because it expects the company to show financial discipline and maintain moderate leverage with a ratio of funds from operations (FFO) to debt at above 30%. This is despite the company’s sizable investments by 2021.

The agency anticipates that Meralco will invest about PHP 120 billion over 2017-2021, principally in its distribution network, to improve its operational resilience and reliability at a time of customer and load growth. In parallel, the company is likely to infuse meaningful equity into its portfolio of power generation projects and distribute sustained amounts to its shareholders, S&P added.

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