Ayala Corp bonds get highest credit rating

MANILA, Philippines - The P40-billion outstanding bonds of conglomerate Ayala Corp. (AC) have secured anew the highest score from local debt watcher Philippine Rating Services Corp. (Philratings).

Strong recurring income, well capitalized business, and established brand equity of the investment firm continue to make its bonds attractive, the credit rating firm said.

PhilRatings said it maintained the PRS Aaa credit rating for several series of AC’s outstanding bonds.

“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.

The conglomerate has an outstanding P10 billion callable bonds due in 2027, P10 billion multiple put corporate bonds maturing in 2021, P10 billion putable bonds maturing in 2017 and P10 billion fixed rate bonds due in 2019.

PhilRatings said the credit score reflects AC’s sustainable and solid recurring earnings and cash flows from key subsidiaries and robust liquidity position.

The country’s oldest conglomerate also benefits from sound capitalization, strong funding capacity with flexibility to tap various sources, and an established brand equity and a strong management team.

“For close to 180 years, AC has contributed to Philippine economic and social growth through its diverse business interests,” Philratings said.

AC is into property development (Ayala Land Inc.) banking (Bank of the Philippine Islands), telecommunications (Globe Telecom Inc.), water distribution (Manila Water Co. Inc.), electronics (Integrated Microelectronics Inc.), infrastructure (AC Infrastructure Holdings Corp.) and power generation (AC Energy Holdings Inc.).

“Given its solid funding capacity and prudent application of its liability management strategy, AC is able to sustain its enhanced financial flexibility and healthy capital structure to support its growth initiatives,” PhilRatings said.

PhilRatings said AC’s P77.3-billion cash reserves as of end-September 2013 provides the company with an adequate liquidity level while maintaining the strong buffer against increasing short-term debt and interest service.