ALI to raise P8 B for hotel, office projects

Published March 12, 2019, 12:00 AM

by manilabulletin_admin

By James A. Loyola

Real estate giant Ayala Land Inc. is launching its second P50 billion debt securities program worth with a plan to raise an initial P8 billion from the issuance of 7-year fixed-rate bonds.

Ayala land inc. logo | Grabbed from

According to Philippine Rating Services Corporation (PhilRatings), it has assigned the highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, for ALI’s proposed Fixed-rate Bonds.

This will be the first issuance in relation to the Company’s new 3-year Debt Securities Program (DSP) of up to P50.0 billion.

The first one, also up to P50 billion, was fully issued in several tranches from March 2016 to October 2018.

The proceeds from the proposed bond issuance will mainly be used to partially finance the construction of the Company’s projects including: Manila Bay Hotel, Capitol Central Mall, Central Bloc, SEDA BGC Expansion, Arca South and the Taguig Integrated Terminal Exchange, Bacolod Capitol Corporate Center in Capitol Central and the Vertis North Corporate Center Tower 3.

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.

On the other hand, a Stable Outlook is assigned when a rating is likely to be maintained or to remain unchanged in the next twelve months.

PhilRatings said the ratings were assigned due to 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.

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

PhilRatings said that, while a weakening peso has contributed to the rise of inflation, such will increase the spending power of Overseas Filipinos (OF) who will get more pesos for every dollar they remit to the Philippines.

“Such may positively affect the sales of ALI considering that a significant chunk of sales are attributed to OFs,” it noted.

It added that “prospects for the real estate sector continue to remain healthy anchored on stable fundamentals, a growing economy, remittances from OFs, resilient consumption spending in retail, the steady growth in tourist arrivals and continued demand from the Business Process Outsourcing (BPO) sector.”