AYALA LAND, Inc. (ALI) has secured the top rating for its fixed-rate bonds worth P5 billion, according to a local debt watcher.

In a statement Tuesday, the Philippine Rating Services Corp. (PhilRatings) said it assigned an issue credit rating of PRS Aaa to ALI’s five-year bonds. This is the highest on its credit rating scale, indicating that the property giant has an “extremely strong” capacity to meet its obligations.

The rating also carries a stable outlook, which means it is unlikely to change within the next 12 months. This outlook aims to further guide investors, regulators, and the general public.

In assigning the rating, PhilRatings said it took into account ALI’s well-diversified portfolio, healthy outlook for the economy and the industry, growing profitability, as well as sound capitalization and manageable debt level.

“ALI is one of the largest real estate conglomerates in the Philippines and is primarily involved in the development of large scale, integrated mixed use estates. It is highly diversified, with projects that serve all market segments of the real estate sector,” PhilRatings said in a statement.

It also noted that ALI has 11,624 hectares of land bank under its portfolio as of end-2018, which can be developed for further growth.

The bonds represent the second issuance from the ALI’s three-year shelf registration program worth up to P50 billion with the Securities and Exchange Commission. Earlier this year, the company raised P8 billion from the issuance of bonds in the same program.

Proceeds will be used to partially finance ALI’s P130-billion capital expenditures for the year. It will specifically fund the construction of Manila Bay BPO and Seda Manila Bay in Pasay City; Ayala Triangle Garden Tower Two in Makati; and Central Bloc in Cebu.

The company’s 2019 budget is 18% higher than the P110.1 billion it spent in 2018, as it looks to hit its target of having P40 billion in net income by 2020. The company will have to grow in the mid-teens level to reach this goal.

Aside from its residential, office, and mall projects, ALI is also set to launch two estates within the year, located in Tarlac and Batangas, in addition to its 26 existing mixed-use developments.

ALI’s net income grew 10.4% in the second quarter of 2019 to P7.8 billion, amid flattish revenue growth to P43.5 billion.

On a six-month basis, ALI’s net income gained 12% to P15.2 billion, while revenues went up 4% to P83.2 billion. — Arra B. Francia

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