Arthaland gets credit rating upgrade

Published December 15, 2020, 3:45 PM

by James A. Loyola

The Issue Credit Rating for Arthaland Corporation’s (ALCO) P3.0 billion Fixed-rate ASEAN Green Bonds has been upgraded by Philippine Rating Services Corporation (PhilRatings) to PRS Aa,from PRS Aa minus.

AStable Outlook was likewise assigned to the rating for the initial issuance in relation to the Company’s 3-year Shelf Registration of up to P6.0 billion. 

Obligations rated PRS Aaare 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. 

PhilRatings said the rating and outlook were assigned given the clear strategic direction, resulting in global recognition as a real estate developer of dual certified (locally and internationally) green projects in the Philippines, leading to continued interest in its products.

Also considered was the company’s growing asset size and scale, albeit relatively trailing in relation to other rated real estate companies, and its relatively conservative approach on project planning and liquidity management, which has provided a buffer from the effects of the pandemic on the Company’s operations and financial position.

PhilRatings said it also factored in Arthaland’s relatively manageable decrease in revenue from real estate sales and continuously growing recurring income in the first nine months of 2020 from the same period in 2019 despite the pandemic and that the economic recession and weaker market conditions have tempered the industry’s growth momentum in the medium term.

ASEAN Green Bonds adhere to the ASEAN Green Bonds Standards which require proceeds to be used exclusively to fund eligible green projects, including certified green buildings.

A regular review on the use of proceeds and quantifiable updates on the funded project’s environmental benefits are also required. 

All of the Company’s completed and on-going projects are at least dual certified with the Philippine Green Building Council’s (PHILGBC) Building for Ecologically Responsive Design Excellence (BERDE), and with the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED).

One of its office projects, Arthaland Century Pacific Tower (ACPT) in Bonifacio Global City, stands as the only triple-certified green project in the Philippines and the first in the world to achieve the EDGE Zero Carbon Certification under the International Finance Corporation (IFC).The Company’s current projects, Cebu Exchange and Savya Financial Center are likewise registered with and aiming to achieve EDGE Zero Carbon Certification under the IFC’s EDGE program. All future developments will likewise aim for such certifications.