According to Philippine Rating Services Corporation (PhilRatings), “Ayala Corporation (AC) will be issuing Php8.0 billion, five-year bonds maturing in 2012. The issuance is rated PRS Aaa,” PhilRatings announced.
A rating of “PRS Aaa” is given to debt obligations with the “smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secured. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
“The highest rating of PRS Aaa assigned to the Php8.0 billion, five-year bond issue of Ayala Corporation is essentially based on the quality of its well-diversified investments portfolio representing companies with stable market positions in industries with healthy growth prospects, collectively providing sustainable earnings and cash flows.
A respected strong brand name developed through the years (173 years to be exact), accompanied by a record of successful business ventures, supported by a sturdy phalanx of professional management, in turn attracting the appropriate strategic partners or co-investors, supply the further reasons for robust business prospects. But even as it harvests from its past investments ripened in market values, the Company is planting seeds in new investments that are hoped to bear fruit in due season, e.g. Business Process Outsourcing.
The Company’s portfolio of investments is in constant dynamic evolution, of divestment, acquisition and purposive rearrangement. It is this dynamic portfolio evolution that directs the funds management of the company, following a strategy of anticipatory funds build-up to allow maximum financial flexibility in fund-raising. PhilRatings notes that while Ayala Corporation has identified its core assets and nurtures them with concentration, yet it is not stymied to explore new opportunities where it can reasonably be expected to yield target profits – and so long as the kind of competence to manage is available.
AC’s unaudited consolidated revenues for the first semester 2007 reached Php41.0 billion, up by 14.8% from Php35.7 billion registered during the same period last year. Sales and services grew by 3% due to higher sales volume of existing businesses, increase in unit sales by the automotive group, as well as the contributions from the operations of companies newly-acquired by the electronics and information technology group. Unaudited consolidated net income attributable to equity holders of the parent likewise grew by 57% from Php7.3 billion in the first half of 2006 to Php11.5 billion in the first half of 2007, resulting from the higher income of its property, banking, water concession and automotive segments.
Incidentally, the Philippine Rating Services Corporation (PhilRatings) is the only domestic credit rating agency in the Philippines accredited by both the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC). It is also a founding member of the Association of Credit Rating Agencies in Asia (ACRAA), which now counts twenty-four (24) domestic credit rating agencies in the Asian region as its members.
(Mr. Ed F. Limtingco can be reached at 0917-7220521 or at elimtingco@cibi.net.ph)