Moody's upgrades PLDT credit rating

ABS-CBN News

Posted at Oct 30 2012 03:18 PM | Updated as of Oct 31 2012 03:07 AM

MANILA, Philippines - Philippine Long Distance Telephone Co.'s (PLDT) credit rating was upgraded by Moody's Investors Service, following a raise in the Philippines' rating.

Moody's hiked PLDT's rating from Baa3 to Baa2, with a "stable" outlook.

"Despite its strong fundamental credit quality, PLDT's ratings were previously constrained at the Baa3 level by the two-notch differential with the then sovereign rating of Ba2," Yoshio Takahashi, Moody's assistant vice president and analyst, said in a statement.

"The upgrade of the sovereign rating to Ba1 therefore allows Moody's to upgrade PLDT's ratings to Baa2," Takahashi added.

Moody's on Monday upgraded its long-term foreign-currency rating on the Philippines from Ba2 to Ba1, a notch below investment grade.

"PLDT's dominant market position, strong financial metrics, and excellent liquidity support its Baa2 ratings. Notwithstanding such strengths, the rating also reflects Moody's perception of PLDT's increased investment appetite and accelerated capex programme, together with a 100% dividend payout ratio which Moody's expects will be maintained," Takahashi said.