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Debt watcher retains top rating for ALI bonds

Posted on March 26, 2012 09:59:11 PM [ BusinessWorld Online ]

A DEBT WATCHER yesterday announced it was keeping its top rating for proposed and outstanding bonds from Ayala Land, Inc. (ALI) due to the company’s reportedly well diversified nature and strong capitalization.

The interior of the Tower One & Exchange Plaza in Makati City, headquarters of Ayala Land, Inc. is seen from the lower floors. Philippine Ratings Service Corp. has retained its top rating for the listed developer’s proposed and outstanding bond issuances. -- Photo By Jonathan L. Cellona

Following a recent review, local credit ratings agency Philippine Ratings Service Corp. (PhilRatings) retained its outstanding “Prs Aaa” score for Ayala Land’s proposed P5-billion bond issuance, as well as its outstanding bonds worth P4 billion, the press statement showed.

“The ratings reflect the following factors: Ayala Land’s well-diversified portfolio complemented by solid brand equity and a highly-experienced management team; sound profitability coupled with strong cash flow generation and cash reserves, and conservative capitalization with ample room for additional debt,” PhilRatings said.

Last month, the real estate firm said it was issuing the multi-year bonds worth P10 billion in order to fund general capital expenses. This comes on top of an earlier P4-billion bond issue first issued back in 2008.

In the meantime, the company announced last week that it was earmarking as much as P60 billion -- its biggest investment in a single area yet -- to develop six districts within Makati City, the country’s so-called financial capital.

Ayala Land has allotted a record P37 billion in capital expenditures this year alone to fund new residential and leasing projects, as well as for the acquisition of new properties moving forward.

This amount will be partially sourced from seven- and 10-year corporate bonds worth P15 billion that were issued last month, earlier reports said.

Ayala Land hiked its net income for 2011 to a record P7.14 billion versus P5.46 billion it generated in 2010, while total consolidated revenues rose by 17% to P44.21 billion from P37.8 billion two years ago.

Total expenses last year grew by 12% to P33.50 billion in 2011 from P29.95 billion, year on year.

“Indications are strong that the growth in profitability will continue in the medium-term given the current favorable industry and general economic environment,” PhilRatings noted.

Ayala Land shares slipped by 1.66% to P20.75 yesterday. -- Franz Jonathan G. de la Fuente
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