Small Business Corp gets Aa rating

The Philippine Rating Agency (PhilRatings) has assigned an issuer rating of PRS Aa minus (Corp.) to Small Business Corp. (SB Corp.) A company rated “PRS Aa” differs from the highest rated corporates only to a small degree, and has a STRONG capacity to meet its financial commitments relative to that of other Philippine corporates.

 A plus or minus sign is added to qualify the relative position of an issuer for a particular rating category.

SB Corp.’s rating is primarily grounded on its very supportive regulatory environment, which is seen to provide support to its credit profile going forward. The New Magna Carta for Micro, Small and Medium Enterprises (MSMEs) effectively highlights the corporation’s role in the Philippine government’s advocacy of promoting MSMEs.

The new law enhances SB Corp.’s business profile, vesting the corporation with additional powers that will help SB Corp. fulfill its social agenda. Additionally, it provides financial support by providing new fund sources for the corporation, including provisions giving a five-year grace period on dividends to be paid to the National Government, and limiting dividends to not more than 30 percent of net income thereafter provide ample room for capital build-up.

The business and financial opportunities to be made available by the Magna Carta, however, will have to be supported by more specific plans and strategies for SB Corp. to maximize these opportunities. Ongoing asset quality improvement efforts by SB Corp. are similarly positively viewed by PhilRatings.

An issuer rating is an opinion on the general and overall creditworthiness of the issuer, evaluating the ability to meet all its financial obligations within a time horizon of one year. The focus is financial strength and stability under normal and stressed conditions to be able to meet existing and prospective financial obligations.