Rockwell Land’s P5-B bond issue secures highest credit rating

MANILA, Philippines - Upscale property developer Rockwell Land Corp. has secured a high score as a bond issuer ahead of its plan to offer P5 billion worth of bonds next month.

In a regulatory filing, Rockwell Land said Credit Rating and Investors Services Philippines Inc. (CRISP) assigned an “AA+” issuer rating on Rockwell Land with a positive outlook or a change for a higher score.

“The ‘AA+’ rating represents CRISP’s credit rating opinion on a borrower’s very strong capacity to repay debt with a low probability of default and a high recovery rate in a worst case scenario,” the credit rater said.

“CRISP believes that Rockwell Land has established an esteemed reputation through its innovative and widely acknowledged world-class commercial and residential projects that cater to the high-end and the upper-middle segments of the real property market,” it added.

The credit rating firm also noted the combination of Rockwell Land’s strong presence in the top segments of the property sector, robust income growth, and prudent fiscal management policy.

In the first half this year, Rockwell Land’s net income jumped 25 percent to P554.8 million from P441.3 million a year ago on strong residential sales.

CRISP also assigned a positive issuer score outlook “to signify its confidence that Rockwell Land’s focused growth strategy will result in stronger financial outcomes, increased market share and a more diversified market presence.”

The outlook is premised on stable interest rate, robust overseas remittance trends, and calm overall political environment.

In September, the property firm’s board of directors approved the public offering of up to P5 billion seven-year and one quarter unsecured peso-denominated fixed-rate bonds.

“Proceeds of the said bond issuance will be used to partially finance its various capital expenditures particularly the Proscenium project,” Rockwell Land said.

CRISP said the Lopez family’s property arm is a strong niche market player focusing on the high-end segment, giving it improved leverage in the real estate sector.

Its flagship project, Rockwell Center, was built in 1995 after the shutdown of the thermal power plant. The former power plant complex is now a self-contained, mixed-use community with residential towers, office buildings, a shopping mall, and a graduate school.

“Based on an independent survey, Rockwell Center commands the highest capital value in the country at P133,000 per square meter and is expected to improve by eight percent in the next 12 months,” CRISP said.

Rockwell Land is expected to strengthen its hold on the high-end property market upon the completion of Proscenium by 2018, CRISP said.

The company allotted P26 billion for five towers of the Proscenium in Makati. The 3.6-hectare Proscenium will allow Rockwell Land to generate development income for the next eight years.

As of end-2012, Rockwell Land recorded P2.5 billion sales takeup from the Proscenium.