S&P lowers Philippine Long Distance stand-alone

S&P said it affirmed the BBB+ long-term corporate credit rating on Philippine Long Distance Telephone Co.

The agency also said it affirmed the company’s axA+ long-term Asean regional scale rating, along with the BBB+ long-term rating on its senior unsecured notes.

S&P, however, downgraded the company’s stand-alone credit profile to BBB+ from A- to reflect the company's increasing leverage.

The company recently announced that it would acquire San Miguel Corp.'s telecom operations for 70 billion in Philippine pesos.

This high spending on the spectrum acquisition, along with capital expenditures and sticky returns to shareholders, will likely push the company's debt-to-EBITDA ratio to more than 2x over the next two years, the agency explained.

Nevertheless, the ratio is expected to be less than 2.5x, which is the downgrade trigger, S&P said.

The acquisition is expected to support the company’s operations and consolidate its market position in the highly competitive Philippines telecom industry, the agency said.

The transaction also allows for expanded data services, improved indoor coverage and faster services rollout nationwide, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.