Fitch Ratings raises long-term local currency IDR on PLDT

Fitch Ratings has upgraded its long-term local currency issuer default rating for Philippine Long Distance Telelephone Co., the country’s largest telecom firm. In a statement, Fitch Ratings said it has upped to BBB from BBB- PLDT’s local IDR. At the same time, Fitch said it affirms its AAA rating on the company’s long-term foreign currency IDR. The ratings agency said it has a stable outlook for PLDT. "The upgrade of the local currency IDR recognises the sustained strengthening of PLDT's financial profile through FY06 and H107, with strong positive free cash flow generation enabling significant reductions in both gross and net debt levels, "said Priya Gupta, Director in Fitch's Asia-Pacific telecom, media and technology team. Fitch noted that in the 2006 fiscal year, PLDT was able to retire around $362 million in bank and capital market debt, and achieved additional reductions of $266m through substantial voluntary conversion of its preferred stock to common equity. The agency also said PLDT continued to reduce high-cost dollar-denominated debt through the first semester of 2007, although this was partially offset by subsidiary Smart Communications' issuance of P5.0 billion unsecured fixed-rate notes in February. “The upgrade also reflects the group's sustained strong operating performance and its pre-eminent position in the Philippine telecommunications sector. As at H107, the company had a leading market share of local exchange lines (about 60 percent) and cellular subscribers (about 57 percent) and a dominant share of the nascent broadband market (about 76 percent)," Fitch said. “The Stable Outlook reflects the expectation that PLDT will maintain leading market positions in the telecoms space, with strong cash flow generation helping to maintain or improve its financial profile," it added. - GMANews.TV