CEBU Landmasters, Inc. (CLI) will be issuing P5 billion worth of corporate notes this year to partially finance its projects in Cebu and Davao.
In a statement issued Tuesday, local debt watcher Philippine Ratings Services Corp. (PhilRatings) said it has assigned CLI a PRS Aa rating, the second highest in its credit rating scale. This indicates that the issuer’s capacity to meet its financial obligations is very strong, while the issuance itself is of high quality and is subject to very low credit risk.
PhilRatings likewise gave the offering a stable outlook, which means that the rating is unlikely to change in the next 12 months.
“PhilRatings shall continuously monitor developments relating to CLI and may change the rating and outlook at any time, should circumstances warrant a change,” the company said in a statement.
CLI is tapping the bond market less than a year after it first listed its shares at the stock exchange last June. The company had then raised P2.9 billion to support its aggressive expansion in the Visayas and Mindanao regions.
Proceeds from the offering will be used to partially finance CLI’s projects, which includes the first central business district in Davao City called Davao Matina Business Park, as well as Ming-Mori Technobusiness Park in Minglanilla, Cebu.
The debt watcher cited CLI’s sound management and strategy, competitive advantage in the Visayas and Mindanao markets, and the positive economic and industry outlook as some factors for coming up with the credit rating.
CLI continues to be bullish on the Visayas and Mindanao markets, with plans to launch 20 new projects this year. This will bring the total number of developments under CLI’s portfolio to 66.
The scheduled project launches is expected to translate to P7 billion in reservation sales for the company. In turn, revenues will likely increase by 35% to P5.3 billion, while net income is projected to climb by 31% to P1.7 billion.
The company is banking on the government’s infrastructure project to help spur economic growth outside Metro Manila, given its focus in Visayas and Mindanao.
CLI earlier said that it will be spending P8.8 billion in capital expenditures this year, in a bid to expand in General Santos City, Butuan City, Ormoc City, and Roxas City.
The listed property developer delivered a 66% increase in net income to P1.294 billion in 2017, fueled by a 66% gain in revenues to P3.929 billion for the year.
Shares in CLI added two centavos or 0.44% to close at P4.60 each at the Philippine Stock Exchange on Tuesday. — Arra B. Francia