[ bworldonline.com ]
AYALA LAND, Inc (ALI) will be issuing P8 billion worth of fixed rate bonds this year to partially finance its hotel, mall, and office projects.
The listed property developer will use the funds raised from the bonds for several projects lined up for the year, including Seda Hotel in Manila Bay, Seda Bonifacio Global City Expansion, Arca South and the Taguig Integrated Terminal Exchange in Taguig, as well as Vertis North Corporate Center Tower 3 in Quezon City.
The fresh capital will also be used to finance projects in the provinces, namely Bacolod Capitol Corporate Center and Capitol Central Mall in Bacolod, and Ayala Malls Central Bloc in Cebu.
This is the second time ALI made use of the SEC’s debt securities program. The first registration also amounted to P50 billion and was issued in a span of three years from March 2016 to October 2018.
Local debt watcher Philippine Ratings Services Corp. (PhilRatings) assigned the bonds a PRS Aaa rating, the highest in its credit rating scale. This indicates that the company has an “extremely strong” capacity to meet its financial commitments.
The rating also carries a stable outlook, which means it is unlikely to change in the next 12 months.
PhilRatings took into account ALI’s well-diversified portfolio, healthy outlook for the economy and real estate industry, growing profitability, and sound capitalization in coming up with the rating.
“Prospects for the real estate sector continue to remain healthy anchored on stable fundamentals, a growing economy, remittances from overseas Filipinos, resilient consumption spending in retail, the steady growth in tourist arrivals and continued demand from the Business Process Outsourcing sector,” according to PhilRatings.
The debt watcher noted that ALI has two retail bond issuances that will mature this year, namely fixed rate bonds worth P9.35 billion due in April, and P2.98-billion HomeStart B bonds due in October.
The fund-raising activity will support ALI’s plan to spend P130 billion in capital expenditures this year, 18% higher than its spending in 2018, as it continues to expand its residential, office, commercial, and retail developments. The rest of the capex budget will be funded through bank debts.
The company also plans to launch P130 billion worth of projects for the year, including two estates in Tarlac and Batangas.
ALI booked a net income of P29.2 billion in 2018, 16% higher year on year as revenues also rose 17% to P166.25 billion.
Shares in ALI slipped 0.58% or 25 centavos to close at P42.90 each at the stock exchange on Tuesday.
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