International credit rating agency S&P Global upgraded the debt rating of Manila Electric Co., the country’s largest power distributor, by a notch to ‘BBB’ with stable outlook from ‘BBB-’.
The credit rating upgrade reflects the solid financial performance and strategic investments of Meralco, placing the listed power distributor’s debt rating just below the ‘BBB+’ sovereign rating of the Philippines.
S&P Global highlighted Meralco’s strong financial position, driven by improved profitability in power generation and consistent cash flows from its distribution business.
The rating agency expects Meralco to maintain a favorable ratio of funds from operations to debt and double-digit earnings before interest, taxes, depreciation and amortization growth.
Key investments include Meralco’s entry into the local natural gas market with an liquefied natural gas facility in Batangas and a 3,500-megaWatt solar energy farm in Nueva Ecija, Luzon.
“This investment grade credit rating upgrade from S&P Global is a testament to our commitment to financial stability and long-term business goals. It also motivates us to further pursue strategic investments in power generation and innovative solutions that meet the evolving needs of our customers and support the Philippines’ energy security and sustainable economic growth,” said Meralco chairman and chief executive officer Manuel Pangilinan in a statement.
S&P Global noted that Meralco’s liquidity is strong, supported by robust cash flow and capital market access, with the stable outlook contingent on continued conservative financial management and effective execution of growth strategies
