SMC Tollways’ P35-B bonds retain top credit rating

SMC TOLLWAYS CORP. has retained the highest credit rating for its P35-billion outstanding bonds from Philippine Rating Services (PhilRatings).

PhilRatings affirmed the PRS Aaa credit rating with a stable outlook for the company’s P35-billion bonds, reflecting the highest quality and minimal credit risk.

“The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” the agency said in a statement dated Dec. 23.

A stable outlook is assigned when the rating is expected to be maintained or remain unchanged over the next 12 months.

SMC Tollways is primarily responsible for the rehabilitation, construction, and development of the Skyway System, as well as overseeing its continuous maintenance and operations. The expressway network is a key arterial corridor connecting the northern and southern parts of Metro Manila.

The company operates under the infrastructure arm of San Miguel Corp. (SMC), which also runs the South Luzon Expressway, Southern Tagalog Arterial Road, Tarlac-Pangasinan-La Union Expressway, and the NAIA Expressway.

In issuing the rating, PhilRatings highlighted SMC Tollways as a major expressway operator under the San Miguel Group, noting its sustained growth in revenues and earnings supported by strong demand for services; a conservative capital structure despite the capital-intensive nature of its business; and ample liquidity backed by robust cash-flow generation.

For the nine months ending September, SMC Tollways reported a 1.5% increase in net income to P7.4 billion, while revenues rose 5.7% to P16.6 billion.

PhilRatings also noted that the company’s interest-bearing debt declined by 6.1% to P52.3 billion as of end-2024. Total equity increased by 19.6% to P51.3 billion, improving the debt-to-equity ratio from 1.3x at the end of 2023 to 1.0x at the end of 2024.

The local credit watchdog also cited the company’s strengthened liquidity position, supported by strong cash generation and healthy short-term finances. — Sheldeen Joy Talavera