SECURITIES  AND  EXCHANGE  COMMISSION

Washington, D.C.  20549

 

FORM  6 -K

 

REPORT  OF  FOREIGN  PRIVATE  ISSUER

PURSUANT  TO  RULE  13a-16  or  15d-16  OF

THE  SECURITIES  EXCHANGE  ACT  OF  1934

 

Report  on  Form  6-K  dated  May30, 2003

(Commission  File  No.  1-15024)

 

 

 

PHILIPPINE  LONG  DISTANCE  TELEPHONE  COMPANY

(Name of Registrant)

 

Ramon Cojuangco Building
Makati Avenue, Makati City

Philippines       0721

(Address of Principal Executive Officers)

 

 

Indicate by check mark whether the registrant files or will file annual reportsunder cover of Form 20-F or Form 40-F:

 

Form 20-F:  y                        Form 40-F:  o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper aspermitted by Regulation S-T Rule 101 (b) (1):

 

Yes:  o                                    No:  y

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper aspermitted by Regulation by Regulation S-T Rule 101 (b) (7):

 

Yes:  o                                    No:  y

Indicate by check mark whether the registrant by furnishing the informationcontained in this form is also thereby furnishing the  information to theCommission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of1934:

 

                Yes:  o                                    No:  y

 

 

 

 

 

 

 

 

 

Enclosure:

 

 

 

A copy of the disclosure letter we filed today withthe Philippine Stock Exchange and the Securities and Exchange Commissionregarding the press release issued by Fitch Ratings affirming PLDT’s SeniorUnsecured foreign currency and local currency ratings at “BB-“. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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30 May 2003

SECURITY CODE:  CM-040
 

 

THE PHILIPPINE STOCK EXCHANGE

Disclosure Department

4th Floor PSE Centre

Exchange Road, Ortigas Center

Pasig City

 

Attention:         Mr.Jose G. Cervantes
Senior Vice President 

 

Ladiesand Gentlemen:

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Enclosed is a copy of a Current Reportunder Section 17 of the Securities Regulation Code (“SRC”) with a copy of apress release issued by Fitch Ratings affirming PLDT’s Senior Unsecured foreigncurrency and local currency ratings at “BB-”.  The outlook for the ratings haschanged to Stable from Negative.

 

Thisshall also serve as the disclosure letter for the purpose of complying with PSECorporate Disclosure Requirements.

 

Respectfully yours,

 

 

MA. LOURDES C. RAUSA-CHAN

Corporate Secretary

 

MLCRC:amq

Encs.

 

 
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30 May 2003
 

 

 

SECURITIES & EXCHANGE COMMISSION

Money Market Operations Department

SEC Building, EDSA

Mandaluyong City

 

Attention:         Director  Justina F. Callangan

                        Corporations Finance Department

 

Gentlemen:

 

Re       :           Philippine Long Distance TelephoneCompany

                        SEC Registration No. PW-55

 

In accordance with Section 17.1 (b) of the SecuritiesRegulation Code, we submit herewith five (5) copies of a Current Report with acopy of a press release issued by Fitch Ratings affirming PLDT’s SeniorUnsecured foreign currency and local currency ratings at “BB-”.  The outlookfor the ratings has changed to Stable from Negative.

 

Respectfully yours,

 

 

MA. LOURDES C. RAUSA-CHAN

Corporate Secretary

 

MLCRC:amq

Encs.

 

 

 

 

 

 

                                                SECURITIESAND EXCHANGE COMMISSION

 

 

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                                                  CURRENTREPORT UNDER SECTION 17

                                          OFTHE SECURITIES REGULATION CODE (“SRC”)

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1.                 30 May  2003

(Date ofearliest event reported)

 

2.                 SEC Identification Number  PW-55

 

3.                 BIR Tax Identification No. 000-488-793

 

4.                 PHILIPPINELONG DISTANCE TELEPHONE COMPANY                                        

            Exact name of registrant as specified in itscharter

 

5.         PHILIPPINES                  6. _____________ (SEC Use Only)  

Province, country or other jurisdiction                        IndustryClassification Code

            of Incorporation

 

7.         Ramon Cojuangco Building, MakatiAvenue, Makati City                    1200 

            Address of principaloffice                                                                   PostalCode

 

8.         (632)814-3664                                           

            Registrant'stelephone number, including area code
 

9.         Not Applicable

            Former name or formeraddress, if changed since last report

 

10.       Securities registeredpursuant to Sections 8 and 12 of the SRC

 

            Title of Each Class          Number of Shares of Common Stock

          Licensed and Amount of Debt Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

We disclose that based on the attachedpress release, Fitch Ratings affirmed PLDT’s Senior Unsecured foreign currencyand local currency ratings at “BB-”.  The outlook for the ratings has changedto Stable from Negative.

 

 

 

SIGNATURE

 

            Pursuant to the requirements of the SecuritiesRegulation Code, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned hereto duly authorized.

 

 

 

 

PHILIPPINE LONG DISTANCE

TELEPHONE COMPANY

 

 

 

MA. LOURDES C. RAUSA-CHAN

Corporate Secretary

 

 

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Date: 30 May 2003 

 

Distribution Copies:    5 copies – Securities & ExchangeCommission

                        1 copy    -Philippine Stock Exchange

                                    1 copy    - CompanySecretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**This message has been sent by Fitch Ratings,the International Credit Rating Agency**

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**FITCH CHANGES OUTLOOK ON PLDT TO STABLE FROM NEGATIVE**

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FitchRatings–Hong Kong/London–30 May 2003: Fitch Ratings, the international ratingagency, has today affirmed the Senior Unsecured foreign currency and localcurrency ratings of the Philippine Long Distance Telephone Company (PLDT) at‘BB-’ (‘BB Minus’). At the same time, the Outlook for the ratings has beenchanged to Stable from Negative. 

 

The change inthe Outlook reflects PLDT’s successful execution of a multi-phase fundingstrategy that has both termed out debt obligations and reduced liquiditypressures surrounding debt maturing in 2003 and in 2004. Liquidity pressureshave been further eased due to rising operating cash flow and falling capex.Both the company and the group are now generating positive free cash flow,which has resulted in a modest debt reduction that is expected to continue inthe near to medium term. PLDT remains focused on refinancing and on debtreduction to further improve its financial profile.

 

The newOutlook also reflects the fact that PLDT’s wholly-owned subsidiary SmartCommunications has recently gained permission from its lenders to lift itsdividend to PLDT to 70% of FYE02 profits, up from 40% last year. Fitch expectsdividends to continue being paid by Smart at a payout ratio of 70%. Anotherfactor was the resolution of an ownership dispute that surfaced in 2002 whichresulted in management retaining the support of major shareholders.

 

The ratingaction takes into account the subdued economic growth environment and therecent launch of a new cellular service “Sun Cellular” by DigitalTelecommunications Inc (Digitel), a fixed-line competitor of PLDT. Thecombination of these two challenges remain a concern for Fitch, but the agencybelieves that PLDT’s resolute pursuit of enhanced liquidity and debt reductiontogether with the group’s leading market brands and positions should enablethese challenges to be overcome. Any further positive rating action wouldlikely hinge upon PLDT having demonstrated its ability to manage the currentcompetitive environment by continuing its progress in deleveraging.

 

PLDT’s ratingreflects its high financial leverage, leading positions across all major facetsof the Philippine telecom sector, and the positive cash flow generated by itstraditional fixed line telephony services and high-growth cellular business.Operating margins have been consistent and, with further improvement to workingcapital management, cash flow has the potential to increase although growthwill hinge upon the existence of a relatively rational competitive environment.

 

At FYE02, PLDT’snet debt to EBITDA (excluding dividends from Smart) and EBITDA to net interestcover was 5.3x and 2.4x respectively a marginal improvement on the 5.4x and2.2x of FYE01. Including Smart dividends these key metrics further improve to5.0x and 2.5x respectively. Consolidated leverage (includes Smart but excludesPiltel financial obligations) and EBITDA to net interest cover improved to 3.5xand 3.4x respectively at FYE02 from 4.5x and 2.4x respectively at FYE01.Theratings of PLDT’s global bonds, senior notes and convertible preferred stockhave also been affirmed at ‘BB-’, ‘BB-’ and ‘B’ respectively. The Outlook forthese ratings is Stable.

 

 

Contact:

JonathanCornish, Hong Kong, Tel: +852 2263 9901

CharlesChang, Hong Kong, Tel: +852 2263 9900

 

 

 

 

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**SIGNATURES**

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registranthad duly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 

 

 

**PHILIPPINE LONGDISTANCE TELEPHONE COMPANY**

 

 

 

 

                                                 By:  **MA. LOURDES C. RAUSA-CHAN**

Corporate Secretary
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Date:  May 30, 2003
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