ALI retains top credit score for P15-B bonds

MANILA, Philippines - Property giant Ayala Land Inc. (ALI) has retained the top credit score for its P15-billion long-term bonds issued in April last year.

Local debt watcher Philippine Ratings Services Corp. (Philratings) said it maintained the issue credit rating for ALI’s outstanding bonds at PRS Aaa.

“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,” Philratings said.

Philratings said the credit score reflects continuously growing profitability coupled with strong cash flow generation and high cash reserves; conservative capitalization; diversified portfolio with a substantial strategic landbank; and favorable outlook for the real estate sector.

“ALI is one of the largest real estate conglomerates in the Philippines,” Philratings said, adding that it is also into office, shopping centers and hotel operations.

ALI is operating under five major brands – Ayala Land Premier for the upscale segment, Alveo Land for the upper and middle-income segment, Avida Land, Amaia Land for economic housing, and BellaVita for socialized housing.

For its landbank, Philratings said ALI had 5,695 hectares of landbank located in various growth centers throughout the country for its future developments.

In the first half, profits of the property arm of the Ayala conglomerate surged 30 percent to P5.62 billion from P4.33 billion last year, while consolidated revenues spiked 36 percent to P36.63 billion from P27 billion a year ago.

The income growth was driven by the strong performance of its property development, commercial leasing and construction businesses.

“The company’s high income translates to a substantial amount of cash flow and debt servicing capacity,” Philratings said.

In 2012, the property firm generated P10.48 billion in cash from operations, up from P8.76 billion in 2011. As of end-June, ALI raised P14.26 billion in cash from operations and posted a cash balance of roughly P38 billion.

Philratings said its issuer score is based on available information and projections at the time that the rating review is ongoing.

“Philratings shall continuously monitor developments relating to ALI and may change the ratings at any time, should circumstances warrant a change,” it added.