CLI maintains high rating for P5-B notes

Published August 3, 2020, 3:57 PM

by James A. Loyola

Cebu Landmasters Inc. retained its PRS Aa rating with a Stable outlook for its outstanding Series A to C Corporate Notes amounting to P5 billion issued in 2018.

The proceeds were allocated to strategic land acquisition in Cebu, Dumaguete, Bacolod, Cagayan de Oro (CDO), Davao, Bohol, and Iloilo. Part of the proceeds were also set aside for the development of the 22-hectare Davao Global Township in Matina, Davao.

Philippine Rating Services Corporation (PhilRatings) said obligations rated PRS Aa are of high quality and are subject to very low credit risk. The obligor’s capacity to meet its financial commitment on the obligation is very strong.

A Stable Outlook is assigned when a rating is likely to be maintained or to remain unchanged in the next 12 months.

PhilRatings said CLI’s rating and outlook reflect its sound management and strategy, with a sustained competitive advantage in the Visayas and Mindanao markets as evidenced by its growth over the last few years.

It also noted the firm’s sustained growth in the past years although the pandemic is seen to temper growth momentum in the medium term.

The rating also factored in CLI’s good coverage of interest and current debt, complemented by an adequate capital structure, which are seen to provide a satisfactory buffer for debt servicing during the pandemic.

However, PhilRatings warned of threats from a highly competitive market, with peers having access to significant capital and a substantial landbank, but this is counterbalanced by the Company’s ability to form strategic joint venture partnerships.

CLI is a Cebu-based company engaged in the development, sales, leasing, and management of real estate. The Company’s portfolio includes: residential condominium units, subdivision houses and lots, townhouses, hotels, office projects, retail spaces and townships.