Megawide Construction Corporation's Planned Bond Issue Receives a 'PRS Aa' Rating with a Stable Outlook

Megawide Construction Corporation (Megawide) has proposed a P4.0 billion bond issue with an up to P1.0 billion oversubscription offer. Philippine Rating Services Corporation (PhilRatings) has assigned an Issue Credit Rating of PRS Aa with a Stable outlook. While business development opportunities will be included in the oversubscription allotment, proceeds from the base offer will be utilized for other general corporate objectives and to refinance the company's current debt obligations.

Additionally, PhilRatings kept its Stable Outlook and PRS Aa Issue Credit Rating for the company's outstanding P4.0 billion-rated bonds.

PRS Aa rated obligations have a very low credit risk and are of excellent quality. The debtor has a very strong financial commitment to repay the obligation. On the other side, a stable outlook suggests that the given rating will probably be kept or won't change throughout the course of the following year.
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The following factors were considered when assigning ratings to Megawide: (1) its strong track record in the construction industry; (2) its noteworthy recent expansion projects aimed at diversifying into less cyclical sources of revenue; (3) the government's infrastructure projects supporting the favorable industry outlook and opportunities; (4) the company's earnings rebound, albeit with easing margins attributed to a strategic approach; and (5) its improved leverage levels.
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The projections and facts that were available at the time the rating review was conducted were the basis for PhilRatings' ratings. PhilRatings will keep a close eye on Megawide-related developments and will be able to adjust the ratings as necessary.
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One of the leading businesses in the Philippine construction industry is Megawide, which has established a strong reputation. The Philippine Contractors Association Board (PCAB) has granted it a AAAA Contractor's License. Megawide is eligible to submit bids for private projects with no upper bound on contract value because it is in the top classification and category for construction companies. Similarly, Megawide's government registration was granted a Large B classification, enabling the company to take part in major infrastructure projects such as roads, bridges, piers, airports, railroads, waterworks, and power plants.

Megawide has already won four distinct projects under various regimes. Megawide thinks it is in a strong position to win large-scale infrastructure projects because of its history of working with the government under multiple leaderships and its versatility in project types.