Moody's to Acquire Minority Stake in PhilRatings

MANILA, Philippines — Moody’s Corp. has agreed to acquire a minority stake in Philippine Rating Services Corp. (PhilRatings), expanding its presence in the country as demand for financing creates opportunities for the domestic bond market. In a statement, Moody’s said the investment would make Moody’s Ratings the first global credit rating agency to invest in a domestic rating agency in the Philippines. The transaction’s value and the size of the stake were not disclosed. Manila-based PhilRatings will continue to operate independently after the investment, retaining its own management, governance and credit rating processes. The deal comes as the Philippines seeks funding for infrastructure and other investments, creating room for businesses to raise money through bonds, or debt securities sold to investors. Moody’s pointed to more than $100 billion in planned infrastructure investment in the Philippines over the next three years as an indication of the market’s potential. “Strong domestic debt markets are essential to supporting sustainable economic growth,” said Wendy Cheong, managing director and regional head of Asia Pacific at Moody’s. “PhilRatings has built deep insight into the local market, and its ratings serve as a strong complement to Moody’s global views on credit for investors in the Philippines.” Moody’s said domestic corporate bonds outstanding in the Association of Southeast Asian Nations are more than twice the size of cross-border holdings. Outstanding bonds refer to debt that has been issued but has yet to be repaid. As the Philippine bond market develops, the company said credit ratings and research could help borrowers tap new sources of funding, plan how to raise capital and demonstrate transparency to investors. For PhilRatings, the investment is expected to bring access to technical support and international practices while preserving its independence in assigning ratings. “Moody’s Ratings’ global standards, best practices and technical support will help us advance our mission to strengthen the credit market infrastructure in the Philippines,” PhilRatings president Angelica Viloria said. “Moody’s role as a minority stakeholder reinforces our commitment to trust, credibility, and best-in-class credit ratings and research for the Philippine market,” Viloria added. The acquisition will expand Moody’s network of affiliated domestic credit rating agencies across Asia-Pacific.