Ayala Land gets top rating for P8-billion fixed rate bonds

[ bworldonline.com ]
LOCAL DEBT watcher Philippine Ratings Services Corp. (PhilRatings) assigned the highest credit rating for Ayala Land, Inc.’s (ALI) proposed issuance of fixed rate bonds worth P8 billion.
In a statement issued Monday, PhilRatings said it had given the listed property developer’s proposed bonds a PRS Aaa rating with a stable outlook. The rating indicates that ALI has an extremely strong capacity to meet its financial commitment, while the obligation is “of the highest quality with minimal credit risk.”
Meanwhile, a stable outlook means that the assigned rating is unlikely to change in the next 12 months.

The bonds represent the remaining unissued balance out of the company’s P50-billion shelf registration program filed with the Securities and Exchange Commission back in 2016.

ALI said the funds raised from the issuance will be used to partially finance several projects in the pipeline, including the Seda Hotels Bay Area in ParaƱaque, Seda Hotels Bonifacio Global City expansion, leasing projects in Arca South, the Taguig Integrated Terminal Exchange, and the Vertis North Corporate Center Tower 3.

The company will also be funding projects outside Metro Manila, namely Ayala Malls Capitol Central in Bacolod, the Bacolod Capitol Corporate Center, and the Cebu Central Bloc mixed-use complex.

PhilRatings took into account ALI’s well-diversified portfolio with a sizable and strategic landbank, a healthy outlook for the real estate industry, its rising profitability and healthy cash flows, and a sound capitalization with manageable debt level and mix.

“PhilRatings shall continuously monitor developments relating to ALI and may change the ratings at any time, should circumstances warrant a change,” the debt watcher said.

ALI has programmed to spend P110.8 billion in capital expenditures this year, the highest allocation in the company’s history as it looks to take advantage of the strong demand for real estate properties.

Alongside the higher capital spending, the company has also outlined the launch of P125 billion worth of projects for 2018.

ALI generated a net income attributable to equity holders of the parent of P13.5 billion in the first six months of 2018, 18% higher year on year as revenues climbed 25% to P80.4 billion.
Revenues from the sale of residential lots and office spaces alone surged by 27% to P55.7 billion, while the sale of commercial and industrial lots went up by 16% to P3.9 billion.

The property giant recorded reservation sales of P72 billion during the six-month period, indicating the sale of P12 billion worth of residential units every month.

The company targets to generate P40 billion in revenues by 2020, aiming for an equal contribution from both residential development and leasing segments by then.

Shares in ALI rose by six centavos or 1.46% to end at P41.60 on Monday’s trading session. — Arra B. Francia
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