Asialink gets ‘BB’ credit rating from S&P
S&P Global Ratings assigned its “BB” long-term credit rating to Asialink Finance Corp.—below investment grade—citing the Philippine financing firm’s robust capitalization and good profitability that provide a buffer against asset-quality headwinds from rapid loan expansion.
In a statement on Monday, the debt watcher also gave Asialink—a lender to micro, small and medium enterprises as well as individual consumers—a “stable” outlook, indicating that the current rating would unlikely be changed in the next 12 to 24 months.
S&P also assigned a short-term issuer rating of “B” to the company.
S&P said its starting point for rating local finance companies not regulated by the central bank is “BB-.”
This is three notches below the anchor for the country’s banking sector to reflect the higher industry risks that finance companies in the country face relative to banks.
Even so, S&P said it expected Asialink to maintain its leadership in Philippines’ refinancing and second-hand auto loan segments over the next 12 to 24 months.
The debt watcher noted that the company has strong capitalization, boosted by a significant equity infusion from its financial sponsor, Creador, a private equity fund.
Still, S&P said Asialink’s asset quality has pockets of weaknesses due to the company’s rapid expansion and weaker recovery in some business segments.
Asialink’s higher-risk-higher-return business model resulted in an elevated weak loans ratio, which stood at about 11.5 percent as of 2024, almost double the banking sector average.
