Stradcom Corporation, the sole provider of IT-enabled services to the Land Transportation Office (LTO), has accumulated a total of P588.5 million in the Collection Account set up to meet payments on issued Asset Backed Bonds.

Philippine Rating Services Corporation (PhilRatings) thus expects the next maturity of the Asset Backed Bonds to be easily met. The next principal maturity of P500.0 million is on April 25, 2010 while Series III of the Bond amounting to P600.0 million will mature on April 25, 2011.

The Bonds were issued in three series and are backed by Stradcom’s computer fee revenues and specific contract assets in relation to the LTO IT project. Series I of the Bonds amounting to P500.0 million matured on October 25, 2008 and was paid on time.

According to PhilRatings, it is maintaining its existing credit rating of PRS Aa plus for the remaining P1.1- billion SPT LTO-IT Asset Backed Bonds issued by the Special Purpose Trust in relation to a securitization transaction.

Obligations rated ‘‘PRS Aa’’ are of high quality and are subject to very low credit risk since the obligor’s capacity to meet its financial commitment on the obligation is very strong. A plus sign is included to further qualify the rating.

PhilRatings said the ratings were arrived at after considering: The continued regular and timely remittance to the Collection Account for bond servicing; strong profitability and cash flow; and growing market demand.

Going forward, PhilRatings said Stradcom’s profitability and cash flow from operations are expected to remain strong due to its position as the sole provider of IT-enabled services to the Land Transportation Office.

PhilRatings said it shall continue to monitor developments related to the Bonds over the life of the rated issue. The credit rating assigned to the issue can be changed, at any time, should circumstances warrant such a change.

Stradcom’s revenues continued to grow from P1.1 billion in 2006 to P1.5 billion in 2007 and P1.8 billion 2008 due to a combination of higher computer fees, increase in transaction volume, and the implementation of new services.

Net income, however, was lower by 27.7 percent at P650.7 million in 2008 from P901.0 million in 2007. The decrease in net income was primarily due to a one time gain of P324.2 million in 2007 that resulted from a downward adjustment in the contract price of an IT facility.