Ayala Land bonds bag highest credit rating

AYALA LAND, INC. (ALI) received the highest credit score from Philippine Ratings Services Corp. (Philratings) for its proposed bonds amounting to P7 billion.

In a statement on Thursday, the local debt watcher said it assigned a “PRS Aaa” credit rating with a stable outlook on the proposed fixed-rate bonds, which are part of the property developer’s P50-billion shelf offering approved by the Securities and Exchange Commission in March 2016.

Ayala Land has already issued P25 billion in fixed-rate and homestarter bonds, which also bagged the highest rating with stable outlook from Philratings.

PRS Aaa, the highest score assigned by PhilRatings, indicates minimal credit risk and “extremely strong” capacity of the issuer to meet its financial commitment on the bonds.

A stable outlook, on the other hand, means that the rating is likely to remain unchanged in the next 12 months.

In issuing the credit score, Philratings took into account ALI’s growing profitability, sound capitalization, well-diversified portfolio, and sustained healthy outlook for the real estate industry.

For this year, ALI said it is allotting a capital expenditure program of about P88 billion, higher than the P85.40 billion disbursed in 2016. It noted that P20 billion of the planned spending will be financed by debt.

The property developer intends to spend P40.7 billion on residences, P11.8 billion on malls; P10.6 billion on land; P9.2 billion on offices; P5.5 billion on estates; P4.4 billion on hotels and resorts; and P4.9 billion on others.

The residential business accounts for bulk of the capital layout, with the launch of P100 billion worth of products for sale. It targets to introduce 19,000 units or more than double the 7,300 offered last year in projects worth P61.5 billion.

This year, the company plans to complete seven shopping centers with a total gross leasable area of 224,000 sq.m. These include Ayala Malls The 30th, which opened in January in Pasig City; Ayala Malls Vertis North; Ayala Malls Feliz in Cainta, Rizal; and Ayala Malls One Bonifacio High Street in Taguig City.

ALI also looks to launch a total of 185,000 sq.m. of gross leasable office space in Vertis North, Circuit Makati and The 30th in Pasig within the year.

In addition, the company will open its largest Seda Hotel in Quezon City and first resort-type accommodation under the homegrown brand in El Nido, Palawan.

The property developer is looking to launch two more estate developments spanning 20 hectares in Davao and 35 hectares in Pasig City alongside.

ALI booked a net income of P20.9 billion in 2016, 19% higher from a year ago, with rising residential and office sales boosting its property development business.

Shares for ALI closed at P35.55 each on Thursday, remaining unchanged from the previous trading day. —