ALI to raise 110 billion

Real estate giant Ayala Land, Inc. (ALI) is raising 110 billion from the issuance of fixed-rate bonds to fund the construction and expansion of office buildings, malls and hotels.

The firm is also planning to allot part of the proceeds from the acquisition of land in Laguna and Batangas, said Philippine Rating Services Corporation (PhilRatings).

The agency has assigned the highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, for ALI’s proposed fixed-rate bonds which will be issued in tranches maturing in possibly two years and in 7.25 years.

This will be the third issuance in relation to the company’s three-year Securities Program (SP) of up to 150 billion.

The proceeds from the proposed bond issuance will be used mainly to partially finance ALI’s general corporate requirements and for such specific purposes as may be determined from time to time.

This includes the construction of One Ayala Avenue, Ayala Triangle Garden 2, Vermosa Mall, the refurbishment of Glorietta and Greenbelt Malls, and the Seda Nuvali Expansion.

PhilRatings said obligations rated PRS Aaa are of the highest quality with minimal credit risk and ALI’s capacity to meet its financial commitment on the obligation is extremely strong.

The rating was assigned given ALI’s well-diversified portfolio with a sizable and strategic landbank for future expansion, complemented by solid brand equity and a highly experienced management team.

PhilRatings also noted the sustained healthy outlook for the economy and real estate industry; continuously growing profitability, coupled with healthy cash flow generation and high cash reserves; and ALI’s sound capitalization, with a manageable debt level and mix.

ALI will use a mix of internally generated cash, as well as proceeds from new loans to service its debt obligations, including the proposed bonds.

The firm is also seen to be in a good position to settle its 12.98-billion Home Starter Bonds due in October 2019.