VILLAR-LED Vista Land & Lifescapes, Inc.’s (VLL) planned P10-billion bond issuance received the top credit rating from a local debt watcher.
In a statement Monday, Philippine Rating Services Corp. (PhilRatings) said it has assigned a “PRS Aaa” credit rating to VLL, the highest in its scale of creditworthiness.
The rating was also given a stable outlook, meaning it is seen to stay the same in the next 12 months.
PhilRatings said it considered three factors in giving VLL such a rating: the company’s diversified portfolio, its improving profitability and the favorable outlook in the industry.
It said the property developer, whose primary business is in building residential projects for all income segments, has been continuously expanding its footprint to enter mass market retail malls.
PhilRatings noted of VLL’s acquisition of Starmalls, Inc. in 2015, which it said helped diversify the company’s portfolio.
“VLL has built over 400,000 homes, 31 malls, 52 commercial centers and seven office buildings. As of September 30, 2019, the company’s projects were distributed in 147 cities and municipalities in 49 provinces throughout the Philippines,” it said.
PhilRatings also took note of the 11.9% compound annual growth rate of VLL’s consolidated revenues since 2014. It said the company was able to maintain strong margins as its average gross profit margin stood at 59.8% over the past five years.
“Given the steady stream and the performance of its projects, VLL was able to generate positive cash flows from its operations,” it said.
In the first nine months of 2019, VLL’s attributable net income increased 12% to P8.83 billion, as its consolidated revenues grew 9% to P34.36 billion.
PhilRatings said the government’s infrastructure program, which is expected to benefit the real estate industry, is another plus for VLL.
“Colliers believes that there is a strong demand for residential units. It is expected that Metro Manila’s condominium stock will grow by 19.3% to 141,760 units. Leasing demand likewise remains firm,” the debt watcher said, citing real estate consultancy firm Colliers International Philippines.
VLL said last month it filed with the Securities and Exchange Commission an application to issue fixed-rate bonds worth P5 billion with an oversubscription option of up to P5 billion. The company also said it plans to raise up to P40 billion from the bond market to fund its residential and commercial projects. This includes a separate application for the shelf registration of three-year, fixed-rate retail bonds worth P30 billion.
Shares in VLL at the stock exchange were flat on Monday to close at P7.69 apiece. — Denise A. Valdez