Filinvest Land Inc., a member of the Gotianun Group, has obtained the highest Issue Credit Rating of PRS Aaa from Philippine Rating Services Corporation (PhilRatings) for its planned bond issuance of up to P10 billion.
The firm disclosed to the Philippine Stock Exchange that it is planning a P8.0 billion Bond Issuance, with an Oversubscription Option of up to P2.0 billion.
PhilRatings has also maintained the PRS Aaa Issue Credit Rating for each of the outstanding bonds of FLI, with a total amount of P25.8 billion.
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.
Each of the ratings was also assigned an Outlook of Stable which means the rating is likely to remain unchanged in the next 12 months.
PhilRatings said the assigned issue credit ratings take into account FLI’s established brand name and track record, with geographically diverse real estate products and substantial land bank for future expansion.
It also considered the firm’s sound growth strategies, focused on building a balanced mix of real estate sales and recurring income; its muted earnings in view of the current pandemic crisis, counterbalanced by positive cash flows; and the subdued industry performance given the lingering economic and market uncertainty caused by the COVID-19 pandemic.
As of end-June 2021, FLI had a land bank of approximately 1,854.5 ha of raw land, including approximately 201 ha of land under joint venture agreements which are sufficient to sustain several years of real estate development and sales.
For its real estate business, FLI will continue its focus on mass market housing products in the affordable and middle-income segments which account for 50 percent of housing demand across the country.
On the other hand, its leasing business continues to build its pipeline of leasing projects for both its retail and office-building portfolio to generate recurring revenues.
In terms of profitability, the Company posted declines in both its total revenues and total net income in 2020 and in the first half of 2021 due to lower revenues generated from both real estate and leasing segments in view of the pandemic.
However, PhilRatings said FLI is well-positioned to see its profitability recover in the medium-term. It also expects to continue to generate positive operating cash flows going forward.