PHILIPPINE Rating Services Corporation (PhilRatings) has assigned an issue credit rating of PRS Aa plus to the proposed P4.1 billion debt issuance of Hedcor Sibulan Inc. (HSI), a subsidiary of Aboitiz Power Corporation (AP), Aboitiz Power told the stock exchange on Monday.
Obligations rated PRS Aa are of high quality and are subject to very low credit risk and indicates that the obligor’s capacity to meet its financial commitment on the obligation is very strong.
In a statement submitted by Aboitiz Power to the exchange, PhilRatings said it likewise assigned a rating outlook of stable to the assigned issue credit rating. An outlook is an indication as to the possible direction of any rating change within a one-year period.
PhilRatings said the rating and the assigned outlook took into account several key considerations, including the track record and substantial experience of HSI’s shareholders, management and technical personnel; HSl’s relatively stable profitability profile (its sole customer is Davao Light and Power Corporation or DLPC); healthy margins; and healthy liquidity and capital position to service its proposed debt issuance.
HSI is a special purpose company tasked to develop, construct and operate three run-of-river hydroelectric power plants in Barangay Sibulan, Sta. Cruz, Davao del Sur, harnessing water from the Sibulan River and Baroring Creek which runs through Mt. Apo and other adjacent mountains.
It operates the following power plants: the 16.5-megawatt Sibulan Hydro A; the 26-MW Sibulan Hydro B; and the 6.6-MW Tudaya Hydro 1 for a total capacity of 49.1 MW.
As of end 2015, the company is effectively a wholly-owned subsidiary of AP.
With over 37 years of experience in developing and operating hydro power plants, Hedcor operates more than
22 hydro power facilities across the country with a total capacity of 185 MW.
AP has outstanding PRS-Aaa rated bonds worth P10 billion. AP also either directly or indirectly owns HSI’s outstanding preferred shares.
DLPC has a 12-year power supply contract with Hedcor which began in 2010. DLPC is also 100 percent owned by AP and is the third-largest privately-owned electric distribution utility in the Philippines.