Philippine Rating Services Corp (PhilRatings) recently announced it has given its highest rating to San Miguel Brewery, Inc.´s (SMB) proposed bond issue of up to P20 billion. The pioneer domestic credit rating agency cited SMB´s extremely strong capacity to meet its financial commitment.

In a statement, PhilRatings assigned "PRS Aaa" for the P20-billion proposed bond issuance to be paid in three tranches -- three, five and 10 years.

The proceeds of which will be used for purchase of land worth P6.8 billion and brands from parent company San Miguel Corporation amounting to P32 billion.

PhilRatings likewise considered the SMB´s sustainable improvement in earnings, its strong cash flow generation and managed debt utilization, including the company´s demonstrated financial flexibility.

SMB continues to strengthen its market leadership in the industry, with its market share growing from 91 percent in 2000 to 95 percent in 2007.

Last year, SMB reported a 25 percent increase in net profit to P10.04 billion as net sales posted an 11 percent growth to P48.8 billion.

PhilRatings said the company´s market leadership will continue to be supported by its strong and popular brand portfolio, well-defined growth strategy, the proximity of its production facilities to consumer markets and its extensive and efficient distribution system.

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