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Ayala Land’s P21-B outstanding bonds get high credit ratings

Posted on January 04, 2015 10:24:00 PM [ BusinessWorld Online ]
By Daphne J. Magturo, Reporter

AYALA LAND, Inc.’s (ALI) outstanding P21-billion bonds issued last year secured another high rating from a separate credit ratings agency, the 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 over the weekend.

This is the highest rating granted by the agency, which noted Ayala Land’s “continuously growing profitability, coupled with healthy cash flow generation and high cash reserves.”

PhilRatings also cited the company’s “sound capitalization” with a manageable debt level and mix; well-diversified portfolio with a “sizable and strategic land bank” for future expansion and complemented by “solid brand equity and a highly experienced management team”; as well as supportive outlook for the real estate industry, backed by sound economic fundamentals.

“The bonds were initially rated by another credit rating agency in 2013 but credit rating monitoring duties for these bonds going forward have since been transferred to PhilRatings for the purpose of consolidating all rating requirements under a single rating agency,” the statement read.

In September 2013, Credit Rating and Investors Services Philippines, Inc. said it reaffirmed its AAA issuer rating on Ayala Land, with a stable outlook.

However, PhilRatings noted that its ratings are based only on available information and projections at the time that the rating review was performed.

“PhilRatings shall continuously monitor developments relating to ALI and may change the ratings at any time, should circumstances warrant a change.”

Ayala Land is one of the largest real estate firms in the country and competes in the high-end, middle-income and affordable housing segments, as well as in traditional office, business process outsourcing office and shopping center leasing, hotel operations, and construction.

As of end-2013, the company’s land bank across the country spans 8,453 hectares.

Ayala Land’s nine-month net income jumped by an annual 25% to P10.8 billion, while consolidated revenue similarly rose 20% to P68.3 billion.

“The company’s high income translates to a substantial amount of cash flow and debt servicing capacity,” PhilRatings said.

Shares in the company ended trading on Dec. 29 at P33.70 apiece, down 20 centavos or 0.59%.
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