The Po family’s Arthaland Corporation (ALCO) has maintained the Issue Credit Rating of PRS Aa, with a stable outlook for its outstanding Green Bonds amounting to P6 billion.
In a statement, Philippine Rating Services Corporation (PhilRatings) obligations rated PRS Aa are of high quality and are subject to very low credit risk and the obligor’s capacity to meet its financial commitment on the obligation is very strong. A stable outlook means the rating is likely to remain unchanged in the next 12 months.
PhilRatings said the rating assigned is in relation to the company’s capacity to pay the rated bonds only and is not an opinion on the project’s adherence to the ASEAN Green Bonds Standards.
The rating and outlook were assigned given Arthaland’s good reputation and experience in developing premium green certified buildings.
It also considered the firm’s ability to grow and compete in its chosen segment, despite the presence of larger, more established competitors; improved and manageable leverage position; and significant revenue and net income growth.
ALCO is a recognized sustainable developer of premium residential and commercial properties and has the unique distinction of being the only real estate developer in the country with a 100 percent certified sustainable residential and commercial portfolio.
The company is also the first real estate developer in Asia and the first signatory from the Philippines to the Net Zero Carbon Building Commitment of the World Green Building Council (WorldGBC). As a signatory to this program, ALCO commits to decarbonizing its entire portfolio by 2030.
Arthaland is in the last year of its medium-term goal (2018-2024) where it intends to grow its Gross Floor Area (GFA) to approximately 456,019 sqm.
Its completed projects, Arya Residences, Arthaland Century Pacific Tower, Cebu Exchange, and Savya Financial Center, along with the ongoing developments Lucima, Eluria, and the components of Sevina Park (including the remaining towers of Una Apartments awaiting launch) already contributed to ALCO’s target GFA by 2024.
In 2023, the company’s total debt declined to P17.1 billion from P17.7 billion in 2022. On the other hand, total equity grew to P13.1 billion from P12.1 billion in 2022.
This led to an improvement in the debt-to-equity (DE) ratio from 1.5 times in 2022 to 1.3 times, as of end-2023. The company’s leverage position is seen to remain manageable over the projected period, supported by the constant plowback of earnings.