By Zinnia B. Dela Peña (The Philippine Star) Updated January 20, 2010 12:00 AM
MANILA, Philippines - Filinvest Land Inc. (FLI) has secured a PRS Aaa rating from the Philippine Rating Services Corp. for the additional issuance of P3 billion worth of bonds.
FLI issued recently P5 billion in bonds comprising P500 million due in 2012 and P4.5 billion due in 2014. The first bond series was assigned a rating of PRS Aaa in October 2009.
“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.”
The rating took into consideration the following key considerations: strong growth of FLI’s real estate and leasing operations; its improving cash generation; conservative debt position; and financial flexibility.
The rating also reflects the following factors which were considered when the PRS Aaa rating was assigned to FLI’s P5-billion bond issue last October 2009: FLI’s diversified portfolio; focus on the mass housing segment which enhances FLI’s resilience; and favorable industry conditions.
Despite having to face a more challenging environment brought about by the global financial crisis and relatively weak GDP growth in the country, FLI’s revenues for the first nine months of 2009 were generally unchanged from the same period for the previous year. The slight drop in real estate revenues, brought about by the overall decline in high-end property sales experienced industry-wide, was offset by the slight increase in FLI’s rental income. Although expenses were slightly higher, net income managed to register a 4.2-percent increase as a result of the lower corporate tax rate.
The company is expected to post increased growth from 2010 to 2015. Forecasted hikes in real estate revenues will come from the strong performance of the affordable, middle-income and high-end segments. Mid-rise buildings such as One Oasis-Cebu, One Oasis-Davao, One Oasis-Ortigas, Bali Oasis and the company’s first high-rise building, The Linear, will generate bulk of future revenues.
Rental income is also expected to augment FLI’s revenue generation, although at more modest growth levels. The improvement in leasing operation results will come from additional lease area and rental escalations. FLI is also expected to benefit from the earnings potential of Cyberzone Properties Inc’s (CPI) Business Process Outsourcing buildings through its acquisition of Africa-Israel Properties (Phils.), Inc.’s 40 percent stake in CPI.
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