ALI gets top rating for P7-B bonds

MANILA, Philippines -  Property giant Ayala Land Inc. plans to issue 10-year fixed-rate bonds amounting to P7 billion.

The bond issue was assigned a credit rating of PRS Aaa, with a stable outlook, by local credit watchdog Philippine Rating Services Corp.

These bonds are part of the company’s three-year debt securities program  of up to P50 billion. The company has so far issued a total P25 billion in a combination of fixed-rate bonds and Homestarter bonds.

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.

PRS Aaa is the highest rating assigned by PhilRatings.

On the other hand, an outlook is an indication as to the possible direction of any rating change within a one-year period and serves as a further refinement to the assigned credit rating for the guidance of investors, regulators, and the general public.

A stable outlook is defined as: “The rating is likely to be maintained or to remain unchanged in the next 12 months.”

In assigning the rating, PhilRatings took into account ALI’s continuously growing profitability, coupled with healthy cash flow generation and high cash reserves;  sound capitalization, with a manageable debt level and mix; and its well diversified portfolio.

The local credit watcher also considered ALI’s sizable and strategic landbank for future expansion, highly-experienced management team,  and sustained healthy outlook for the real estate industry backed by sound economic fundamentals.

ALI is one of the largest real estate firms in the country with its operations organized along several business lines: property development (residential, office and commercial as well as industrial development projects); commercial leasing (shopping centers, offices and hotels and resorts); and services (construction and property management).

It has 20 estates across the country and is present in 55 identified growth centers. With 9,852 hectares of developable landbank as of the end of 2016, ALI believes it has sufficient properties for development in the next few years.

The company is eyeing a net income of P40 billion by 2020, which translates to a 20 percent annual growth rate from the P11.7 billion profit achieved in 2013.

Last year, the property behemoth booked a net income of P20.9 billion, representing an increase of 19 percent from the previous year.

For 2017, ALI has set a capital spending program of P87.6 billion to support its continued growth.

“The prospects for the real estate industry continue to remain healthy, with numerous projects  in the residential, office and retail sectors lined up for the medium-term period. Demand also remains robust, with the continued growth of the domestic economy, the existence of a substantial housing backlog, a growing business process outsourcing (BPO) industry, rising remittances and growing disposable incomes,” PhilRatings said.