Filinvest Land's P3-billion bond issue gets highest rating

MANILA, Philippines - The proposed P3 billion fixed-rate bond issue of Filinvest Land Inc., the real estate development arm of the Gotianun family, was given the highest rating of PRS Aaa by credit ratings agency PhilRatings.

“Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong,” PhilRatings said.

FLI’s bond offering has a greenshoe option of up to P2 billion which will increase the issue size to P5 billion.

The bonds, which have a maturity of up to five years, will be sold through a public offering, scheduled within the fourth quarter of the year.

In assigning the rating, Phlratings took into consideration FLI’s improving net cash provided by operating activities; its diversified portfolio; the company’s resilience as enhanced by its continued focus on the mass housing segment; the steady growth in its real estate and leasing operations; its sound debt position and strong financial flexibility; and favorable industry conditions.

From 2009 to 2016, FLI expects to register continued growth in revenues, primarily driven by its affordable and middle-income segments. In the first half this year, the company posted a net income of P759 million or 6.27 percent higher than the previous level. Total revenues rose 9.7 percent to P2.16 billion on the back of higher real estate sales and rental revenues.

FLI has set a P5.3-billion capital budget this year, up 29 percent from the P4.1 billion spent in 2008.

This year’s capex will go to the development of five to six mid-rise buildings, two buildings catering to the business process outsourcing (BPO) sector, the first phase of the P25-billion township to rise a reclaimed land in Cebu City, and the company’s first high-rise residential project called The Linear.

FLI is rolling out 29 new projects and phases this year, estimated to generate P7.4 billion in sales across all market segments. It plans to launch more phases in its ongoing mid-rise projects in Ortigas Extension and Marcos Highway in Pasig City, as well as in Davao and Cebu. It will also launch a similar project in Sta. Mesa, Manila.

For its socialized housing projects, the company is readying new projects within Ciudad de Calamba in Laguna as well as new phases in existing projects in Batangas, Cavite, Tarlac and Pampanga.

The Linear, on the other hand, will comprise two high-rise residential towers offering a total of 1,600 affordable units.

Estimated to cost P1.5 billion, the Makati project will be developed in four stages.

For its BPO projects, under construction are two buildings at Northgate Cyberzone – Vector One and Vector Two - which are slated for completion within the year and will add another 35,600 square meters of gross leasable area.

This should increase the group’s office building portfolio to nearly 168,000 square meters.