Vol. XXI, No. 246 [ BusinessWorld Online ]
Wednesday, July 16, 2008 | MANILA, PHILIPPINES
LISTED AYALA Land, Inc. (ALI) will likely be able to pay its creditors in the next five years for its proposed P4-billion bond issue, having obtained the highest rating from a local credit watcher.
In a statement, the property developer said it had obtained a "PRS Aaa" mark from Philippine Rating Services Corp. (PhilRatings) for the bonds, whose approval is still pending at the Securities and Exchange Commission.
The mark is given to debts with the smallest degree of investment risk. It also means that Ayala Land would be able to pay the principal amount and interest payments given its stable margin. The debt paper will mature in five years.
The property earlier said it would issue P4 billion worth of five-year bonds by the third quarter to partly fund its capital spending.
Ayala Land quoted PhilRatings as saying that it had based its assessment on the company’s strong sales of residential units, shopping rentals and other corporate businesses.
For the first quarter, revenues of the country’s biggest property developer went up by almost a third to P8.23 billion from a year earlier.
For residential units alone, sales reached P3.5 billion from bookings of 1,000 units from 50 projects, a fifth higher than a year ago.
Meanwhile, sales from Ayala Land’s shopping centers amounted to P1 billion, while sales from its corporate business reached P272 million — 17% higher than a year earlier due to higher office occupancy and rental rates, as well as higher fee income from managed buildings.
Ayala Land said PhilRatings had cited its track record of profitability despite the peaks and valleys of the real estate cycle.
This year, the company is spending P24.3 billion, almost half of which will be used for residential projects, a third for corporate business lines and more than a tenth for shopping centers.
Jimmy Ysmael, Ayala Land senior vice-president, said one of their biggest projects is the first phase of Nuvali in Canlubang, Laguna, for which it expects to spend at least P6 billion. The firm is also building the six-star Shangri-La hotel complex and Philippine Stock Exchange Center in Fort Bonifacio, Taguig City.
Meanwhile, Ayala Center Cebu is expected to launch a shopping center later this year, while Ayala Center in Makati will launch in October Glorietta 5, which consists of three levels of retail and five levels of business processing outsourcing offices. — Kristine Jane R. Liu
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