Posted on September 15, 2014 09:51:00
PM [ BusinessWorld Online ]
FILINVEST Land, Inc.’s (FLI) proposed
bond issue of up to P7 billion was assigned a PRS Aaa rating, the highest level
of creditworthiness recognized by Philippine Rating Services Corp.
(PhilRatings).
“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,” PhilRatings said
in a statement on Monday.
The bond offer’s principal amount is
P5 billion, with an oversubscription option of up to P2 billion, and tenors of
seven and 10 years.
PhilRatings also maintained the PRS
Aaa rating of FLI’s outstanding bonds: P4.5 billion due in November; P3 billion
due 2016; P7 billion due 2019; P4.3 billion due 2020; and P2.7 billion due
2023.
PhilRatings said the rating reflects
“sustained growth of FLI’s real estate and leasing operations, resulting in
strong income generation and improved cash flows; its conservative debt
position and high financial flexibility; its established brand name and track
record; its focused strategy, with a geographically diverse portfolio and
substantial land bank for future growth; and economic and industry conditions
which are seen to remain favorable in the medium term.”
Around P4.95 billion of the net
proceeds will be used to refinance the company’s bonds and debts expiring or
with maturities from the fourth quarter of 2014 up to the second quarter of
2015.
The remainder will be used to partly
finance its capital expenditure (capex) requirements up to the second quarter
of 2015, the company said in its preliminary prospectus filed with the
Securities and Exchange Commission on Sept. 4.
This year, FLI allotted P20 billion
worth of capex for project development and “selective land acquisition.” Almost
half of this will go to the development of FLI’s recurring business,
particularly office and retail projects.
“The prospects for the real estate
industry remain strong, with demand remaining highly supportive given the
existence of a substantial housing backlog, as well as the relatively low
prevailing interest rate on home financing,” PhilRatings said.
FLI, a unit of Filinvest Development
Corp., has over 129 projects in 43 cities, with a land bank of 2,347 hectares
as of the first half.
The company’s first-half net profit
grew 15% year on year to P2 billion, while revenue rose 24% to P7.8 billion.
The real estate segment continued to
be the major growth driver, accounting for 79% of sales.
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