Solar Tarlac gets high credit rating

BY LENIE LECTURA AND VG CABUAG – NOVEMBER 18, 2021
from Business Mirror

Credit watcher Philippine Rating Services Corp. (PhilRatings) assigned a credit rating of PRS Aa plus with a stable outlook to Solar Philippines Tarlac Corp.’s (Solar Tarlac) proposed P4.15-billion green bonds.

“Obligations rated PRS Aa are of high quality and are subject to very low credit risk. The obligor’s capacity to meet its financial commitments on the obligation is very strong. A plus (+) or minus (-) sign may be used to further qualify a rating,” PhilRatings said.

PhilRatings said a “stable outlook” means that the rating is likely to be maintained or to remain unchanged in the next 12 months.  In assigning the rating, PhilRatings considered Solar Tarlac’s significant market position in the solar energy industry; very manageable construction risk; asset and customer concentration risk; market risk mitigated with a 20-year Take-or-Pay Power Purchase Agreement with Manila Electric Co. (Meralco) and established solar irradiation data; and general economic uncertainty due to the pandemic, but with opportunities which will benefit the company.

Solar Tarlac is a joint venture between Solar Philippines Power Project Holdings, Inc. and tycoon Enrique Razon’s Prime Metro Power Holdings Corp. In 2020, the two companies entered into a strategic partnership to develop the country’s largest portfolio of solar projects.

Proceeds of the bonds would be used to refinance a P2.225-billion loan used for the construction of Solar Tarlac’s now operating 100 MW solar plant in Concepcion, Tarlac, and to fund the expansion of the plant.