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Ayala's P10-billion fixed rate bond gets highest rating

By Zinnia B. Dela Peña (The Philippine Star) Updated October 22, 2012 12:00 AM

MANILA, Philippines - Ayala Corp.’s proposed P10-billion fixed-rate bond issuance has obtained the highest credit rating of PRS Aaa from the Philippine Rating Services Corp.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk, as the issuer’s capacity to meet its financial commitment on the obligations is extremely strong.

The seven-year bonds will be issued at par or 100 percent of face value and are redeemable in the fourth year.

BPI Capital Corp. is the issue manager.

In assigning the rating, PhilRatings took into account Ayala’s sustainable and strong recurring earnings as well as cash flows from key subsidiaries and associates; sound capitalization; multiple layers of financial flexibility; improved debt and debt service profile; value enhancing and risk-mitigating investment management strategies; as well as solid brand equity and strong management team.      

Ayala’s share in the profits from its diversified portfolio of investments which includes real estate (Ayala Land), banking (BPI), telecommunications (Globe Telecom), water distribution (Manila Water) continued to strengthen the holding company’s profitability profile.

In the six months ended June this year, the conglomerate reported a 35 percent growth in core earnings to P6.3 billion while revenues rose 9.6 percent to P107.5 billion.

Ayala’s cash reserves remained ample at P53.6 billion as of end-2011 and at P71 billion as of end-June this year, providing a strong liquidity level and coverage of short-term debt and interest service.

“Together with the prudent application of its liability management strategy, Ayala maintains enhanced financial flexibility that is well-placed to improve its liquidity position while maintaining a healthy capital structure, scale-up its existing investments, and step up its involvement in new businesses,” PhilRatings said.

“The holding company’s current stance of entering into alliances with local and international partners, who have the scale and track record; who complement its skills and capabilities; and share the same vision for a particular business and sector; provides Ayala with greater operational and financial flexibility to fast-track the development and operations of its investments in the power generation and transport infrastructure sectors, in the Philippines, as well as in other countries,” PhilRatings added.       

As a holding company, Ayala continuously seeks opportunities for expansion, both through organic growth of its existing business lines, as well as through transactions and acquisitions that would add value to the company and to the Ayala Group as a whole.

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