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Ayala Land bonds keep top debt grade

Posted on September 29, 2013 10:01:02 PM [ BusinessWorld Online ]

A LOCAL debt watcher has kept the highest rating for the P21-billion fixed-rate bonds of Ayala Land, Inc., citing the company’s solid fundamentals.

“Credit Rating and Investors Services Philippines, Inc. (CRISP) reaffirms its ‘AAA’ issuer rating on Ayala Land, as the property developer completes its multi-tranche P21-billion bond offering this year,” the credit rater said in a statement yesterday.

The “AAA” rating is CRISP’s highest rating that reflects strong capacity to repay debt obligations by a bond issuer.

Ayala Land in July issued P15 billion worth of fixed-rate bonds -- the first tranche of the P21-billion issuance -- with a 5% coupon rate, and which will mature in 2024.

In reaffirming its prime rating, CRISP noted Ayala Land’s “strength demonstrated by its continuing solid financial performance, market leadership and high quality assets.”

“CRISP [also] assigns a stable outlook to the rating as it believes that Ayala Land’s impressive track record in property development, strong financial performance and its land bank portfolio of high quality assets will sustain its leadership position in a competitive real property development sector,” the debt watcher said.

At the same time, CRISP also reaffirmed its “AAA” rating on Ayala Land’s three-year P3 billion Homestarter Bonds, which were earlier issued in 2012 and 2013.

Last week, another local debt watcher Philippine Ratings Services Corp. affirmed its highest rating for Ayala Land’s P15-billion bonds issued last April.

The rating was maintained given the following key considerations: continuously growing profitability, coupled with strong cash flow generation and high cash reserves; conservative capitalization, with ample room for additional debt; diversified portfolio with a substantial strategic land bank; solid brand equity and a highly experienced management team; as well as continued favorable outlook in terms of the performance of the real estate sector backed by sound economic fundamentals.

Ayala Land shares gained 10 centavos or 0.35% to close at P28.80 apiece on Friday last week. -- Cliff Harvey C. Venzon            

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