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STI Holdings welcomes high credit rating for subsidiary's P3-billion bond offer

2017-01-31

 

MANILA – STI Holdings today welcomed news of the high credit rating of PRS Aa assigned by Philippine Rating Services Corporation (PhilRatings) for the P3-billion bond issue of its subsidiary, STI Education Services Group (STI ESG).

STI Holdings Chair Eusebio H. Tanco said the favorable rating for STI ESG's bond offer should provide investors with an objective reference on the financial health of the company as it endeavors to expand even further in the coming years.

"Even before STI ESG considered entering the local bond market, we made it a point to maintain a steady growth in our financial performance. The rating we received validated this strong commitment," Mr. Tanco said.

PhilRatings disclosed today that STI ESG has been assigned an Issue Credit Rating of PRS Aa for its P3.0 billion bond issue, which meant that the company's proposed debt issue is of "high quality and (is) subject to very low credit risk."

PhilRatings said key factors that led to the rating include STI ESG's ample cash flows with minimal reliance on debt, stable demand for its business, its position as an established educational institution with the ability to adapt to shifts in the industry, and its consistently improving revenues.

"In terms of financial performance, STI ESG's consolidated revenues were on a consistent upward trend historically. From P1.6 billion in 2012, total revenues went up to P2.4 billion in 2016. The bulk of revenues were accounted for by tuition and other school fees, comprising 80.7%-87% of total," PhilRatings said in a statement.

"Over the coming years, consolidated revenues will continue to expand on the back of a continued increase in the number of student enrollees. The Group is focused on organic growth in its schools located nationwide and will continue to pursue this track during the projected period," they added.

It also stated  that STI ESG's bottom line may likely show an upward trend while net profit margins are expected to be maintained within historical levels.

STI ESG operates 32 company-owned and another 32 franchised colleges located all over the archipelago. Apart from these, there are 12 Education Centers, five of which are company-owned.

Just last January 10, STI ESG filed a registration statement with the Securities and Exchange Commission stating that STI ESG is arranging for the shelf registration of P5-billion bonds to be offered in one or several tranches.

The first tranche is worth P3 billion which PhilRatings has assigned a PRS Aa credit rating.

 

 

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