JG Summit retains top credit rating for P9-B bonds

MANILA, Philippines - JG Summit Holdings Inc., the investment vehicle of the family of taipan John Gokongwei, retained its issue credit rating of PRS Aaa for its P9- billion fixed rate retail bonds due in 2014.

PRS Aaa is the highest rating assigned by domestic credit watcher Philippine Rating Services Corp. (PhilRatings).

 “Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” according to PhilRatings.

In assigning the rating, PhilRatings considered the positive outlook for the economy, which bodes well for the JG Summit Group’s highly diversified portfolio; established market position of major subsidiaries; strong management team; sound liquidity; and improved profitability.

Among the companies under JG Summit’s wings are Universal Robina Corp., (branded consumer foods, agro-industrial and commodity food products), Robinsons Land Corp. (property development and hotel management), Digital Telecommunications Philippines Inc. (telecommunications), Cebu Air Inc. (air transportation), JG Summit Petrochemicals Corp. (petrochemicals), and Robinsons Savings Bank (banking services).  

 “JG Summit’s board of directors has demonstrated its ability to provide direction for sustainable growth, while its management has shown expertise to manage very large scale operations. From its beginnings in 1957, the JG Summit Group has managed to grow despite periods of economic downturns to become one of the largest and most diversified conglomerates in the Philippines,” PhilRatings said.

“Liquidity continues to be healthy, as principal source of cash continues to be the group’s operating activities. JG Summit’s indebtedness remained manageable with a debt to equity ratio of 0.8x and net debt to equity of 0.4x as of Dec. 31, 2010,” PhilRatings added.

Universal Robina Corp. (URC) is one of the leading pan-Asian food and beverage companies, and is also a major player in agro-industrial and commodity businesses in the Philippines. It is known for manufacturing and distributing high-performance products such as Chippy, Nova and other snack foods under the Jack n’ Jill brand, Hunt’s tomato-based products, and the C2 Green Tea line.

Robinsons Land, on the other hand, is one of the country’s leading real estate developers in terms of revenues, number of projects and total project size.

Although the country’s telecommunications market continues to be largely dominated by Smart Communications and Globe Telecom, Sun Cellular (the wireless mobile brand of Digitel Mobile Phils. Inc.) has made some headway by increasing its subscriber market share from 12 percent as at end-2008 to 16 percent as at end-2010.

Last week, however, JG Summit announced its plan to relinquish control of Digitel to Philippine Long Distance Telephone Co. (PLDT) in a deal valued at P69.2 billion.